Pub 2 2013 Issue 7

l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s 16 W ith Congress’ willingness to examine tax and fiscal policy, we’ve got an important opportunity to raise a key question: Why do taxpaying American consumers and businesses subsidize the credit union industry, which pays no taxes? Credit unions today barely reflect their humble origins and basic mission of serving people of modest means. On June 26, 1934, President Franklin D. Roosevelt signed into law the Federal Credit Union Act. Credit unions were based on a simple concept: Bring together a closely-knit group of people, pool their resources and provide small loans for one another. The original focus was on individuals with limited resources who might not otherwise have access to financial services. It gave credit unions a special and unique place in our financial system. That’s changed. A lot. As you know all too well, many credit unions have gone far beyond their original mission. With the freedom to seek new markets almost without restriction and to offer a full range of banking and financial products, many aggressive credit unions have leveraged their tax ad- vantage to grow rapidly. In fact, credit unions are now a trillion-dollar industry, consisting of 208 credit unions with more than $1 billion in assets – each larger than 90 percent of all banks. In Alabama…(customize per Keith’s info). We’re calling on Congress to eliminate credit unions’ tax exemption. We’ve prepared a number of resources to help you share our mes- sage with lawmakers, policymakers, businesses and people in your community. These resources are available online at www.aba.com/ ItsTimeToPay. There you will find information for contacting your members of Con - gress, key messages, facts and graphics, a sample speech and Pow- erPoint slide deck, a sample newspaper op-ed and print ad, a sample website banner ad, and social media tools, including sample Tweets, graphs and videos. You can also listen to our recorded webinar on how to use the many online resources that we’ve put together for you. ABA also has established a task force of bankers and state bankers association executives who will guide our approach with the Farm Credit System, another tax-advantaged competitor. In a letter to Sens. Max Baucus (D-Mont.), chairman of the Senate Fi- nance Committee, and Orin Hatch (R-Utah), the committee’s ranking member, I pointed out that credit unions were never intended to be tax-exempt banks. However, that is the reality today. “Credit unions compete head-to-head with banks in communities across this country,” I wrote. “They serve the same markets as banks – particularly commu- nity banks – and there is no practical limitation on who a credit union can serve. In fact, the public does not differentiate between banks and credit unions.” Our message is plain and simple. The time has come for Congress to abolish credit unions’ tax exemption. I hope you’ll join us in sharing that message with your lawmakers and stakeholders. For credit unions, it’s time to pay. E-mail Frank Keating at keating@aba.com @2013 American Bankers Association. All rights reserved. Reprinted with permission. It’s Time to Pay By Frank Keating, President and CEO American Bankers Association