Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CU System
CU government present witnesses in UBIT case
GREEN BAY, Wis. (5/14/09)--In the third day of trial in its challenge of the Internal Revenue Service's unrelated-business income tax (UBIT) policy, Community First CU concluded its case Wednesday and the government presented its first witnesses. The trial began Monday in a U.S. District Court in Green Bay, Wis. The Appleton, Wis.-based credit union filed suit against the government in 2008 after the IRS determined that certain guaranteed asset protection (GAP) and insurance products offered to members fall outside the credit union's main mission and are subject to UBIT. The credit union is seeking a refund of $54,000 in taxes paid on credit life and credit disability insurance and GAP products. According to Eric Richard, general counsel for the Credit Union National Association (CUNA), who was present for the morning session, the credit union concluded its case with two witnesses. Yurri Sauerhammer, a member of Community First, described her experiences with the credit union's credit disability insurance product. Glenn Potts, an expert witness and professor of finance at University of Wisconsin-River Falls, gave his professional opinion about the role that the insurance products play in a credit union and their relationship to the purposes of a credit union. The morning also saw the government's first witness, Birny Birnbaum, a self-employed consulting economist, executive director for the Center for Economic Justice operated out of his home, and a former insurance regulator in Texas. Birnbaum gave an analysis of insurance products and he supported the idea that the insurance products do not support the purposes of a credit union. Gordon Karels, the government's second witness, testified Wednesday afternoon, according to Michael Edwards, counsel for special projects at CUNA. Karels is the Nebraska Bankers Association Professor of Finance and chairman of the Finance Department at University of Nebraska-Lincoln. He is also a board member and investor of a new thrift, Community Bank of Lincoln. Karels teaches a depository institution management class and a personal finance class, and is author of 40 papers, four of them about credit unions. He testified about credit insurance, Edwards said. A judicial order issued by Judge William Griesbach on Monday discourages those in the court room from reporting on the specific content of the testimony, since witnesses who haven't testified yet have been excluded from the courtroom. Community First filed the suit in January 2008 with the support of the Credit Union National Association, the American Association of Credit Union Leagues, CUNA Mutual Group and the National Association of State Credit Union Supervisors. Today the credit union's attorney, Michael M. Conway of Foley and Lardner law firm, will present two expert rebuttal witnesses on behalf of the credit union. They are Gary Fagg, the consulting actuary and owner of Credit Re located in Hurst, Texas, and Michael Medland, retired chartered professional life underwriter with various life insurance companies, including CUNA Mutual Group. Richard told News Now that there is a "good chance" the trial will end early.


News Now LiveWire
Final field-of-membership rule tops April 30 NCUA agenda
7 hours ago
.@CUNA's @Nussle speaks to @VonnieQuinn about #StoptheDataBreaches and reg. relief.
9 hours ago
RT @NCUFoundation: .The Foundation's @hylandhighway with @NatlJumpStart President/CEO Laura Levine at #FLHillDay2015 today:…
12 hours ago
Seriously underwater homes rise, new-home sales tumble News Now:
12 hours ago
#NewsNow Cornerstone Foundation awards $71K in grants
14 hours ago