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Bill prompts tax debate in Massachusetts
WORCESTER, Mass. (2/2/10)--Pending federal legislation in Washington, D.C., that would relax restrictions on credit union member business lending--to 25% of assets from 12.5%--is prompting debate in Massachusetts between credit unions and banks about lending and credit unions’ tax-exempt status. However, Dan Egan, CEO of the Massachusetts Credit Union league, told the Worcester Business Journal (Feb. 1) that “Banks contend that [credit unions] were set up for people of limited means, but that was never the case. They were set up for all consumers.” Since Massachusetts chartered credit unions in 1909, the institutions have acted as a check and balance for the banking industry, he added. Small businesses are turning to credit unions in greater numbers now because they’re finding they can’t get the loans they need from banks, or can’t meet banks’ new, stricter credit requirements, Egan told the publication. “The only ones who don’t want this are the banks,” Egan added. The tax-exempt structure is designed to help credit unions serve the underserved, Michael Lussier, president/CEO of Webster First FCU, Worcester, told the Journal. “We’re helping those people in the community, those blue-collar workers that are sick of being taken advantage of by high fees and lower interest payments,” he added. To read the article, use the link.
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