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News Now

Washington
Treasury cuts bank taxes yet pushes UBIT says CUNA
WASHINGTON (12/16/08)—In its attempts to address the national crisis in the financial markets, the U.S. Treasury Department is creating a “disturbing disparity” in the tax treatment of different kinds of depository institutions and is favoring banks, according to the Credit Union National Association (CUNA). CUNA has requested a meeting with Treasury Secretary Henry Paulson and Internal Revenue Service Commissioner Douglas Schulman to discuss recent actions that CUNA said have showered banks with tax relief to help them survive the current financial crisis, while credit unions needs have not been addressed. To make matters worse, CUNA said in its letter to the Treasury and IRS, state-chartered credit unions continue to have unrelated business income tax (UBIT) claims piled on them. The IRS’s aggressive re-interpretation of law to increase the tax liabilities of state-chartered credit unions under UBIT leaves “less funds for them to lend,” CUNA President/CEO Dan Mica pointed out in the letter. “This harsh position has imposed substantial burdens on credit unions, diverting funds which might better be used to provide loans to consumers for homes, cars and education,” Mica wrote. Noting the “urgent circumstances,” Mica requested that the IRS be directed to halt its efforts against credit unions, and a meeting be scheduled to “discuss this significant issue.”


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