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CUNA, leagues, CUs to protect tax status
WASHINGTON (11/2/05)—The House Ways and Means Committee is set to hear three panels of witnesses today in a historic session examining the federal tax status of credit unions. Witnesses include Norman D'Amours, former chairman of the National Credit Union Administration (NCUA) who is sometimes critical of the movement he served to regulate.
The hearing's scheduled start time was delayed by a half-hour until 10:30 a.m. ET. Credit unions can view the hearing live via the Internet. Connect to the committee website using the resource link below.
The first panel is comprised of government witnesses, including NCUA Chairman JoAnn Johnson who is expected to be formally accompanied by her general counsel, Robert Fenner. Also, to testify are Steven T. Miller, commissioner of the tax-exempt and government entities divisions of the Internal Revenue Service, and Richard J. Hillman, director of financial markets and community investment of the Government Accountability Office. The GAO recently released a study questioning credit union tax policy.
The second panel is split down the middle with three credit union movement representatives and three from the banking industry.
Representing credits unions are:
- Harriet May, president/CEO of Greater El Paso's CU, Tex., will represent the Credit Union National Association (CUNA);
- Retired Vice Admiral Cutler Dawson, president/CEO of Navy Federal, Vienna, Va., for the National Association of Federal Credit Unions; and
- Constance Kennelly, chief executive officer of Tulane-Loyola FCU, New Orleans, whose name was added to the list of expected witnesses Wednesday.
The final panel will feature D'Amours, the former credit union regulator who has in the past claimed that credit unions have strayed from their cooperative mission, John Taylor, of the National Community Reinvestment Coalition, who authored a study calling for CRA requirements for credit unions; and Gordon Karels, an economist from University of Nebraska-Lincoln. Ways and Means Chairman Bill Thomas (R-Calif.) has said the hearing today is intended to examine the legal history of the tax exemption for credit unions, to determine whether credit unions are serving the goals intended with their tax-exempt status. He said the hearing would examine the following issues:
- The history of and Congress' rationale for providing tax exemption to credit unions;
- Whether credit unions are serving the goals intended with their tax-exempt status;
- The use of the tax benefit by credit unions; and
- Changes in the credit union industry, including the growth in credit union membership and services.
"We are taking this hearing seriously," said John McKechnie, CUNA senior vice president, "It is of paramount importance that we protect the tax structure that allows us to pay higher dividends and charge lower rates to all our members.
"We believe that when the truth is told—and if that truth is heard, really listened to—lawmakers will uphold the historical tax status of credit unions that benefits 87 million Americans."
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