Newsroom
May 16, 2017
NAFCU writes Mnuchin, slams ICBA misinformation about CU tax exemption
NAFCU President and CEO Dan Berger, in a letter to Treasury Secretary Steve Mnuchin, hit back Tuesday against misinformation being spread by the Independent Community Bankers of America about the credit union tax exemption in a paper on regulatory relief.
"It was surprising that the ICBA used its white paper as an opportunity to attack credit unions," Berger wrote. "As community-based financial institutions, credit unions and community banks are both familiar with the need to mitigate the currently overwhelming weight of regulatory burden, which should be the primary focus of any sincere plan to promote economic prosperity."
"Simply put, the tax exemption benefits the nation and is an issue of survival for credit unions," Berger added. "Despite what some may claim, there remain significant regulatory and statutory differences between not-for-profit member-owned credit unions and other types of financial institutions – including limits on who they can serve and their ability to raise capital. [However,] during the financial crisis, credit unions continued to lend to consumers and small businesses that were left behind by the banks. Credit unions are proud of their continued service to Main Street America."
Berger also noted that more than one-third of banks are Subchapter S corporations that pay no corporate income tax. He also touted the independent study NAFCU commissioned earlier this year that showed the benefit to U.S. consumers from the tax exemption is $16 billion per year. This adds up to $159 in growth over a 10-year period. Eliminating the exemption would cost the federal government $38 billion in lost income tax revenue and shrink the gross domestic product by $142 billion, eliminating nearly 900,000 jobs in 10 years.
Finally, Berger noted NAFCU's recent recommendations on how the Treasury Department could create a more positive regulatory environment for credit unions and undo the damages caused by the Dodd-Frank Act. He said the association looks forward to continuing to discuss regulatory reform in a productive manner.
NAFCU is encouraging credit unions to reach out and ensure lawmakers understand the importance and value of credit unions' federal tax exemption to the nation's economy. To reach out to lawmakers by email, visit NAFCU's Grassroots Action Center.
"It was surprising that the ICBA used its white paper as an opportunity to attack credit unions," Berger wrote. "As community-based financial institutions, credit unions and community banks are both familiar with the need to mitigate the currently overwhelming weight of regulatory burden, which should be the primary focus of any sincere plan to promote economic prosperity."
"Simply put, the tax exemption benefits the nation and is an issue of survival for credit unions," Berger added. "Despite what some may claim, there remain significant regulatory and statutory differences between not-for-profit member-owned credit unions and other types of financial institutions – including limits on who they can serve and their ability to raise capital. [However,] during the financial crisis, credit unions continued to lend to consumers and small businesses that were left behind by the banks. Credit unions are proud of their continued service to Main Street America."
Berger also noted that more than one-third of banks are Subchapter S corporations that pay no corporate income tax. He also touted the independent study NAFCU commissioned earlier this year that showed the benefit to U.S. consumers from the tax exemption is $16 billion per year. This adds up to $159 in growth over a 10-year period. Eliminating the exemption would cost the federal government $38 billion in lost income tax revenue and shrink the gross domestic product by $142 billion, eliminating nearly 900,000 jobs in 10 years.
Finally, Berger noted NAFCU's recent recommendations on how the Treasury Department could create a more positive regulatory environment for credit unions and undo the damages caused by the Dodd-Frank Act. He said the association looks forward to continuing to discuss regulatory reform in a productive manner.
NAFCU is encouraging credit unions to reach out and ensure lawmakers understand the importance and value of credit unions' federal tax exemption to the nation's economy. To reach out to lawmakers by email, visit NAFCU's Grassroots Action Center.
Share This