As credit union officials hit Capitol Hill this week for an annual lobbying event, ABA today sent a letter to members of Congress that provides background information on several recent actions that would expand the scope and scale of credit unions and relevant questions for them to ask the visiting CU officials and lobbyists.
ABA highlighted the fact that the current credit union tax exemption is one of the single largest corporate tax loopholes — estimated by the Treasury Department to cost taxpayers $27 billion over 10 years — and that it will likely grow as a result of recent National Credit Union Administration actions to expand business lending and dramatically expand credit unions’ field of membership.
Last week, NCUA finalized a rule that allows credit unions to exempt participations in loans to non-members from the statutory 12.25 percent member business lending cap. The rule also eliminates loan-to-value requirements, aggregate limits on construction development loans and the requirement of a personal guarantee. Additionally, the NCUA has proposed to expand its field of membership to allow credit unions to serve combined statistical areas, which are larger than metropolitan areas; areas contiguous to their existing core-based statistical areas; and entire congressional districts, including at-large districts that encompass entire states.