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News Now

Washington
CUNA letter refutes ICBA tax call
WASHINGTON (10/8/10)--Credit unions at large face no threat--and taxpayers will not pay the costs-–for resolving wholesale, “corporate” credit unions recently conserved by federal regulators, Credit Union National Association (CUNA) President/CEO Bill Cheney told key Treasury officials personally yesterday in response to misinformation spread by a community bank lobby group. Cheney made these points in a visit with Assistant Treasury Secretary Michael Barr and in a letter to Treasury Secretary Timothy Geithner, which he also hand-delivered to Barr. The letter was CUNA's response to a Thursday Independent Community Bankers of America (ICBA) letter that claimed that the “taxpayer bailout of the credit union system should cast doubt on the wisdom and the fairness of [credit unions’] tax exempt status.” Cheney refuted the ICBA’s claims, noting that “the ICBA is clearly trying to capitalize on the corporate credit union situation in order to advance their anti-credit union agenda.” The ICBA’s claims of a taxpayer-funded credit union bailout are “simply not true,” Cheney said. “While the bonds to be issued by National Credit Union Administration (NCUA) have the full faith and credit of the United States Government, credit unions--not taxpayers--will pay all of the costs,” he added. Cheney, citing an SNL Financial analysis of community bank recipients of Troubled Asset Relief Program (TARP) funds, noted that over 621 banks still owe a combined $50 billion in funds that were borrowed from American taxpayers. “More than 100 of these banks are behind on their payments to Treasury,” and “taxpayers will very likely be left on the hook for some of the bailout these community banks have received,” Cheney added. Cheney also noted that that the tax-exempt status afforded to credit unions “is one of the highest-yielding investments the federal government has made.” Consumers save more than $7 billion in better rates and lower fees by using credit unions rather than banks, he noted. “While the bankers may complain of an uneven playing field, if there was any truth to their complaint, the evidence would be in the conversion of banks to the credit union charter. That is simply not happening,” Cheney noted.


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