Jim Nussle, president and CEO of the Credit Union National Association, is urging members of the Iowa State Senate to reject legislation that would place an additional tax on credit unions in the Hawkeye State, CUNA said Thursday.
Nussle is a native Iowan who represented the state in the U.S. House of Representatives from 1991 to 2007.
According to CUNA, Senate Study Bill 3197 would raise taxes on Iowa credit union members and reduce taxes on banks and their stockholders, many of whom do not live in the state.
The trade association said bank attacks have “ramped up” in Iowa, prompting CUNA to work closely with the Iowa Credit Union League to combat the issue.
In a letter to lawmakers, Nussle wrote, “Simply put: this legislation would raise taxes on Iowa credit union members and reduce taxes on banks and their stockholders, many of whom do not live in the state. It would make it more expensive for Iowans to access safe and affordable credit provided by not-for-profit financial cooperatives. This legislation is bad for Iowa and we urge this body to soundly reject it.”
Nussle noted credit unions make up only 14 percent of Iowa’s financial market and he argued the competition CUs provide for-profit banks creates a “less predatory environment for Iowans” and keeps bank fees from getting “even more outrageous.”
In the letter, Nussle cited data showing Iowa credit union 60-month new car loans average 3.21%, while the same loan at banks average 4.37%, a difference of $940 on a $30,000 car.
“In addition to quantifiable benefits, credit unions also provide Iowa consumers with significant intangible benefits. Credit unions exist to help people and strictly adhere to the ‘People Helping People’ philosophy and their structure lends to a focus on providing exceptional member (customer) service. Credit unions offer full and fair service to all of their members,” Nussle wrote.
According to Nussle, “Member-owned financial institutions provide great benefits to consumers and Iowa credit unions should be fostered and strengthened not hampered by new taxes as proposed in S.S.B. 3197.”
“As a native Iowan, I know firsthand the positive impact credit unions make in our state,” Nussle continued. “I also know that the notion that the differences in taxes levied on credit unions and banks creates an unfair advantage is a myth. Iowa credit unions seek to offer reasonably priced financial services to their 1.2 million-member owners and raising taxes on credit unions would chill this effort.”