WASHINGTON—In a letter, 36 members of Congress have sent a letter to the House Ways & Means Committee urging that the credit union tax exemption be preserved.

Ways & Means is under pressure from the Trump Administration to put together one large tax package that will renew the president’s tax cuts, which are set to expire, while also finding ways to close the huge federal tax deficit. That, in turn, has led Congress to search for new revenue, and with the banking industry championing the idea, to revoke the credit union tax exemption—at least for CUs of more than $1 billion in assets.

The letter sent to members of the Ways and Means Committee was sent at the prompting of America’s Credit Unions, as well as state CU organizations.

members of congress Friday urged the House Ways & Means Committee leaders to protect CU tax status.

‘Critical Resource’

“We are writing to urge you to protect tax-exempt status of credit unions as Congress considers tax reform and extending expiring provisions from the Tax Credits and Jobs Act. As you are aware, credit unions are member-owned, not-for-profit financial cooperatives that are a critical resource for the families, farmers, and small businesses in our districts,” the letter states.

The letter goes on to state:

• Credit unions provide safe and sound lending opportunities with competitive rates.
• The cooperative structure and “member-centric focus of a credit union is the same, regardless of the size of the institution, large or small.”
• Credit unions focus on local lending and community development that result in “close-knit relationships” with those they serve.

A ‘Tax Increase’

“Credit unions also provide economic benefits to the members,” the letter adds. Studies have shown that credit unions provide over $36 billion in economic benefit to American consumers annually in the form of lower loan rates, higher interest payments and lower fees. Any changes to the current tax treatment of credit unions would threaten these consumer benefits and would be a tax increase on America’s 142 million credit union members.”