WASHINGTON–With a vote expected in at least one congressional committee this Friday on a new tax package, credit unions will be paying particular attention to whether the CU tax exemption is included in the proposal in any form, with credit unions in four congressional districts in particular this week being asked to put in some extra work in contacting their representative.

As the CU Daily has been reporting, Congress 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.

Late last week, 36 members of Congress (20 Republicans and 16 Democrats) sent a letter to the House Ways and Means Committee urging it to leave the CU tax exemption untouched.

“Credit unions also provide economic benefits to the members,” reads a letter that was signed by 36 members of Congress that was sent to members of the committee. “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.”

Looking for the ‘Pay-Fors’

As DCUC’s chief advocacy officer, Jason Stverak, has noted several times, finding the “pay-fors” over the next week and then the weeks that follow will be particularly crucial.

Stverak said defense CUs in the respective districts of House Ways & Means Committee Chair Jason Smith (R-MO) and Richard Neal (D-MA), as well as Senate Finance Committee Chair Mike Crapo (R-ID) and Ranking Member Ron Wyden (D-OR) will be contacting their representatives regarding preserving the tax exemption and to “make sure that they understand the harm that that would happen if the tax exemption goes away, specifically for their ability to serve active duty service members and their families and veterans.

The Rumor

The rumor on Capitol Hill, according to Stverak, is that Senate Majority Leader Sen. John Thune (R-SD) wants a vote on a tax package by Friday, April 4, meaning Thursday night could be what’s known as an all-night “vote-a-rama” on Capitol Hill as each side seeks votes to move legislation. 

Credit unions will also be keeping a wary eye on that process to ensure the Credit Card Competition Act or at least some of its language isn’t included in any legislation that is advanced. That bill and its provisions, which have been inserted in prior Senate bills, is strongly opposed by credit unions and financial institutions, while it has strong support from retailers.

Making Community Banking Great Again

Separately, Stverak said DCUC is providing input as part of the Make Community Banking Great Again initiative being championed by Rep. French Hill (R-AR). That effort has been soliciting suggestions from financial institutions and, in addition to DCUC, America’s Credit Unions has also provided its recommendations (see related story).

“As reforms and policies are advanced for community banks there should be a similar process  to help credit unions,” said Stverak.