WASHINGTON (2/15/13)--The membership of the 11 bipartisan groups set up by the House Ways and Means Committee to craft separate areas of a tax code overhaul includes lawmakers with a good understanding of credit union issues and the credit union difference, Ryan Donovan, senior vice president of legislative affairs for the Credit Union National Association, observed Thursday.
"Those who understand credit unions and understand the public policy reasons for the credit union tax-exemption also know that it is something to protect for the sake of consumers.
"Credit unions are the best option for consumers to conduct their financial services, but taxing credit unions would eliminate this option entirely," Donovan said.
Preserving the tax status of credit unions is a top CUNA priority. Under the Federal Credit Union Act, federal and state-chartered credit unions are exempt from federal income tax because they are cooperatives operated for and by their members, and because credit union shares are essentially members' deposits. The tax status has been re-affirmed periodically by the U.S. Congress and is supported by many lawmakers.
The Ways and Means working groups each will be led by a Republican House member with a Democrat as vice chair. They will focus on the following areas:
- Charitable and exempt organizations;
- Debt, equity and capital;
- Education and family benefits;
- Financial services;
- Income and tax distribution;
- Real estate; and
- Small business and pass throughs.
The groups on financial services and on exempt organizations are the two most likely to study the credit union tax status. The financial services group will be led by Rep. Adrian Smith (R-Neb.) and vice chaired by Rep. John Larson (D-Conn.) The charitable and exempt organizations group is headed by Rep. David Reichert (R-Wash.) with Rep. John Lewis (D-Ga.) as vice chair.