WASHINGTON-Repeal of the credit union tax exemption was briefly proposed in Congress last week as part of a much larger deficit package, but was killed almost immediately by an alert credit union lobby.
The repeal was included in a budget-balancing bill along with hundreds of other spending and tax provisions proposed by
Rep. Dennis Ross (R-FL), who retracted his position on the credit union tax hours later after being contacted by credit union lobbyists.
Brad Thaler, senior lobbyist with NAFCU, said the trade group met with the representative shortly after it was proposed, and Ross then agreed to pull the provision from the bill.
The bill was one of many that are being drafted by lawmakers to deal with the so-called Fiscal Cliff at the end of the year, when huge spending cuts are scheduled to take effect if other measures are not resolved.
John Magill, chief lobbyist for CUNA, said Ross's staff explained that inclusion of the credit union provision was a mistake, but he acknowledged the tax exemption will continue to be a target going forward. "It had no chance of passing in lame duck," said Magill, of the brief after-elections session Congress is commencing, "but we have to remain vigilant going forward."
The bank lobby in particular will continue to focus on repeal of the credit union tax exemption, one of their main legislative priorities, added Magill.
Repeal of the tax exemption could raise as much as $3 billion in annual revenues, a figure that is growing along with credit unions, according to various estimates.