ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release July 20, 2004 #04-35
E-mail: [email protected]

ACB TO CONGRESS: ‘IF CREDIT UNIONS WANT TO PLAY LIKE BANKS THEY SHOULD PAY LIKE BANKS’

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WASHINGTON, D.C. — Congress should oppose new powers for credit unions and require them to pay taxes, America’s Community Bankers said today.

“We do not believe that credit unions should be granted expanded powers until they pay taxes like all other financial service providers and have community reinvestment obligations,” ACB said in a statement submitted to the House Financial Institutions Subcommittee. The panel is holding a hearing on new activities for credit unions.

“Despite their aggressive product offerings and profitability, this new breed of credit union does not pay federal, state or local income taxes,” ACB said. “As a result, these credit unions and community banks compete for the same customers on an unlevel playing field.” Granting the $623 billion credit union industry new powers would further erode the tax base and widen the federal budget deficit.

ACB said it “is very troubling” that H.R. 3579 would permit tax-exempt credit unions to exceed the commercial lending authority of taxpaying federal savings associations. Credit unions’ commercial lending authority would be doubled to 20 percent of assets, with loans of under $100,000 not counting against the limit. The commercial lending limit for federal savings associations is 20 percent, of which 10 percent must be for small business loans.

“If credit unions desire to become major business lenders or undertake other bank activities, they should become banks, which they can do without changing their cooperative status,” ACB said. “Bottom line: If credit unions want to play like banks they should pay like banks.”

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

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