As Advocates Make Their Case on the Hill, Tax Reform Proposal Leaves Credit Union Exemption Untouched
February 27, 2014
Feb. 27, 2014
Credit union advocates got some good news Wednesday when they hiked the Hill to share the “Don’t Tax My Credit Union” message with lawmakers: Credit unions’ tax status was left untouched in a tax reform plan released by the chairman of the House Ways and Means Committee.
Rep. Dave Camp’s plan to overhaul the tax code does recommend that the biggest U.S. banks and insurance companies be required to pay a quarterly 3.5-basis-point tax on assets over $500 billion. More generally, the plan for simplification of the tax code would cut the top income tax rate from 39.6 percent to 25 percent, and impose a surtax on some of the wealthiest households in the country.
But “after three years of mostly behind-the-scenes efforts, the chairman has found that there is no reason to change or eliminate our tax exemption,” CUNA President/CEO Bill Cheney said Wednesday. “We consider this an endorsement of our long-held position that credit unions’ cooperative, not-for-profit structure remains the bedrock upon which the tax exemption is built.”
Cheney emphasized that Camp’s proposal “is the first word on tax reform, not the last. We know the tax reform process will be long, and will not conclude until a president signs a tax reform bill. Throughout the process, credit unions will continue to actively advocate for the credit union tax status.”
That advocacy effort certainly had the Internet blazing on Tuesday, when a “Don’t Tax Tuesday” blitz reached more than 5.5 million Facebook and Twitter followers and prepared members of Congress for the messages they’d hear from advocates on Wednesday. The campaign included a barrage of tweets from Oregon and Washington and showed “the importance of always delivering our message about the structure, value and impact of the credit union movement,” said Troy Stang, the Northwest Credit Union Association’s president and CEO.
Tax Reform is the Talk of the Hill
Throughout the week, dozens of lawmakers had delivered their messages during general sessions at the Governmental Affairs Conference. But on Wednesday, Northwest advocates took their message to lawmakers, fanning out across Capitol Hill to meet with all four of the region’s senators and all 15 representatives.
Those meetings came off without a hitch, even when a vote in the House disrupted the day’s schedule. Advocates simply used the time to network in Capitol hallways, sharing their talking points with Congressional staffers and others who happened to walk by.
Camp’s tax proposal was the talk of the Hill, needless to say.
Scott Burgess, Rivermark Community Credit Union’s president and CEO, alerted Oregon advocates to the news before introducing Sen. Ron Wyden, who recently became chairman of the powerful Senate Finance Committee. Wyden assured the group that the credit union exemption continued to have his support; he was later joined by Sen. Jeff Merkley for a discussion about the future of housing finance reform.
Sen. Patty Murray drew applause from her Washington constituents when she announced details of the tax plan. “Credit unions,” Murray said, “are crucial to the financial security of our country.”
Sen. Maria Cantwell told advocates that she’s hopeful Congress can pass a tax reform bill. She’d like to make sure the final package retains a sales-tax deduction, Cantwell said, and that the bill includes ways to help the economy – and especially small businesses – grow.
Rep. Cathy McMorris Rodgers echoed Cantwell’s remarks. The Camp proposal is a “discussion draft to get people talking about the potential and the need for tax reform,” she told Washington advocates, but “we believe it is an opportunity for growth.”
Also on the Agenda: Data Breaches, Member Business Lending, Housing Finance Reform
Rodgers and other lawmakers also talked about recent data breaches at Target and other retailers. Rep. Jaime Herrera-Beutler told advocates that she was personally affected by the Target breach; she had to order a replacement card, Herrera-Beutler said, and until Wednesday’s meeting, she didn’t realize who was to blame for that.
Rodgers said she understands the high cost to credit unions and the inconvenience to consumers caused by data breaches, and both Murray and Cantwell said they are aware that financial institutions currently are left holding the bag when breaches occur. The lawmakers said they supported finding a way for the financial burden to be shared by retailers, and Rodgers said legislation is needed that creates standards for retailers to protect consumer information.
Several legislators asked advocates to provide more information on credit union-related issues. Rodgers asked for updates on member business lending, and Spokane Media Federal Credit Union CEO Debie Keesee promised to follow up. Murray and Cantwell both asked to be kept informed on housing finance reform.
And Rep. Peter DeFazio asked Oregon advocates to help him by spreading the word about his bill to create sustainable levels of timber harvesting. The bill would provide jobs in some of the hardest-hit areas of his district, DeFazio said, and OSU Federal CEO Rick Hein said he would work with DeFazio’s office to get more information.
“In our conversations on the Hill, the calls of support for credit unions were loud and frequent,” said Jennifer Wagner, the NWCUA’s senior vice president for advocacy. “With a record number of credit union advocates, it was standing room only in many of the offices. Our tax status was preserved in Rep. Camp’s comprehensive tax reform proposal. Reps. Heck and Kilmer delivered powerful speeches from the main stage at the GAC. It was a great day to be a Northwest credit union advocate.”
Also on Wednesday:
- Unitus Community Credit Union was honored with two national CUNA awards at a special, invitation-only reception. The Dora Maxwell Social Responsibility Award and Louise Herring Philosophy-in-Action Award recognize Unitus for its Money Quest Financial Challenge and its overall community involvement. President/CEO Pat Smith and Laurie Kresl, the credit union’s vice president for planning and business development, were on hand to accept the awards.
- Lower Valley Credit Union was honored with the Trailblazer Award for Outstanding Service to the Underserved by Credit Union Times magazine. “LVCU’s focus on providing both financial education and affordable financial services to its largely lower-income membership made it this year’s Trailblazing credit union,” said David Morrison, senior staff reporter at the magazine. “When making this award, Credit Union Times seeks credit unions that combine teaching members what they need to do with providing affordable products and services which help them do it. LVCU deserves the award and our congratulations.”
- Rep. Derek Kilmer of Washington praised credit unions for creating jobs locally through member business lending during his remarks at Wednesday’s general session. “I have seen how important it is for businesses to get access to economic capital,” Kilmer said. “It can be the difference for a business being able to invest in a new facility – and those are not just numbers on a spreadsheet. They translate into jobs.” Kilmer also praised credit unions for helping Americans save. He is co-sponsor of a House bill that would allow credit unions and other financial institutions nationwide to offer prize-linked savings accounts. A similar bill has been introduced in Senate.
Questions? Contact Gary Stein: 503.350.2216, email@example.com.