NAFCU to IRS, Hatch: Don't grow CUs' compliance burden
NAFCU, in a letter to and conversation with the IRS yesterday and in a personal visit to the office of Sen. Orrin Hatch, R-Utah, argued that requiring credit unions to file additional tax forms would "impose increased regulatory burden on the credit union system" and also "contravene directives from President Trump and the U.S. Department of the Treasury to achieve regulatory reform and rollback throughout the financial system."
NAFCU President and CEO Dan Berger's letter to IRS Acting Commissioner David Kautter was in response to a letter sent by Senate Finance Committee Chair Hatch suggesting that the largest credit unions should file Form 990 information returns to the tax agency. NAFCU discussed with Hatch's office why credit unions should not have additional compliance burdens placed on them.
"Although NAFCU and our members support transparency, requiring credit unions to file additional paperwork is unlikely to increase transparency in a material manner and would only serve to increase the already staggering regulatory burden imposed on credit unions," Berger wrote. "Furthermore, all credit unions, regardless of size, continue to fulfill their core mission to provide their members with high-quality, affordable, and accessible financial products and services."
Berger noted that the IRS already excludes credit unions from some other reporting requirements, and requested that the agency "continue to recognize the importance of credit unions in the nation's financial system and avoid increasing the regulatory burden on credit unions."
Hatch in January sent a letter to the NCUA questioning the credit union industry's federal tax exemption and recent field of membership changes. NCUA Chair J. Mark McWatters' response, sent in March but just made public Monday, defended credit unions' tax status and explained how eliminating the exemption could create safety and soundness issues not only for the industry, but the U.S. economy as a whole.
Following the Hatch letter to McWatters in January, NAFCU defended credit unions' federal tax exemption and the benefits it provides to the nation's economy, as well as the NCUA's role as a strong, independent and transparent regulator.
NAFCU remains engaged on Capitol Hill this week as the American Bankers Association (ABA) holds its annual fly-in in Washington.
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