February 27, 2014

Berger thanks Camp for ensuring no CU tax in reform draft

Feb. 28, 2014 – NAFCU President and CEO Dan Berger yesterday conveyed formal thanks to House Ways and Means Chairman Dave Camp, R-Mich., for making sure there is no provision to tax credit unions in the tax reform discussion draft he released Wednesday.

"Preservation of the credit union tax exemption and related tax issues are the highest priorities of our membership, and we are encouraged that the tax reform discussion draft you released does not alter the tax status of our nation's credit unions," Berger wrote.

In a round-up of "winners" and "losers" under the draft, online news source POLITICO Pro declared credit unions to be among the former. It also quoted Berger: "Based on our initial review, it is good news and consistent with what NAFCU lobbyists have been hearing all along – that Congress has no appetite for repealing credit unions' federal tax exemption."

After a thorough review, NAFCU staff found that Camp's reform draft not only preserves credit unions' federal income tax exemption but also their treatment under the unrelated business income tax. Federal credit unions would, under the plan, remain exempt from UBIT due to their status as instrumentalities of the federal government.

Even so, NAFCU lobbyists will continue to monitor discussions on reform and will keep talking to lawmakers about the benefits credit unions bring to consumers and the economy.

NAFCU's 2014 tax study shows $17 billion in annual benefits to the U.S. economy from the presence of credit unions. It also shows that eliminating the credit union tax exemption would lead to a reduction of 1.5 million jobs over the next 10 years and a decrease in federal revenue.