Newsroom

December 20, 2017

Tax bill heads to president; CU exemption safe

The House yesterday passed the updated conference report for the Republican tax reform bill, the Tax Cuts and Jobs Act (H.R. 1). Keeping the credit union tax exemption intact, the bill now heads to the president's desk for his signature.

"This accomplishment to preserve the credit union tax exemption could not have been achieved without credit unions reaching out to their members of Congress and without the support of our many champions in the House and Senate," said NAFCU President and CEO Dan Berger. "NAFCU has prioritized preserving the credit union tax exemption for years, successfully keeping credit unions top of mind at a time on Capitol Hill when there are so many competing interests.

"NAFCU and our member credit unions sincerely appreciate the willingness of the Trump administration, Treasury Secretary [Steven] Mnuchin, Chairman [Orrin] Hatch, Chairman [Kevin] Brady and members of Congress to meet with us and hear our concerns throughout this process. With the industry's tax exemption untouched, credit unions will be able to continue serving their communities and remain a key player in the financial services arena."

The Senate passed the legislation 51-48; the House passed it 224-201. The House originally passed the bill Tuesday, but voted again Wednesday after the Senate made changes to align the legislation with the chamber's procedural rules. President Trump is expected to sign the bill, though the date of the signing is yet to be set.

Berger and other members of NAFCU's legislative affairs team have been actively engaged on Capitol Hill and with the White House to ensure the credit union tax exemption is left alone. In August, the association met with Mnuchin to discuss tax reform efforts and Berger was invited on FOX Business to explain the importance of the exemption. The association has also held numerous meetings with senators, representatives and administration officials throughout the year.

Last month, NAFCU launched a grassroots effort calling on member credit unions to defend the industry's tax-exempt status at the local level as some in the banking industry called for its elimination.

Preserving the credit union tax exemption has been NAFCU's top priority throughout this year's tax reform efforts – and well before. A recent Wall Street Journal article on credit unions' success at protecting their tax status reflected on NAFCU's efforts in 2012 when Rep. Dennis Ross, R-Fla., proposed taking away the credit union tax exemption. Berger called Ross within minutes of receiving the news, the WSJ reports, and said, "Hey, we are coming to see you." Ross pulled back his proposal within hours.

An independent tax study released by NAFCU earlier this year found the credit union tax exemption benefits $16 billion to the U.S. economy each year.