In a letter to House Financial Services Committee and Senate Banking Committee leaders last week, the nonpartisan National Taxpayers Union expressed concerns about the credit union industry’s recent push to increase the member business lending cap. In the letter, NTU’s Thomas Aiello noted that “over the past several years persistent, increasingly urgent issues surrounding transparency, oversight, and unfair competition in the credit union industry have arisen, and said his organization would oppose the MBL expansion until key reforms are made to the credit union industry, including:
- The removal of an exemption for credit unions from filing IRS Form 990.
- A re-examination of the exemption for credit unions from unrelated business income tax, including whether business lending should be considered part of a credit union’s exempt purpose.
- Leveling the playing field to ensure that all entities face the same regulatory requirements and pay roughly the same level of tax on non-CU asset acquisitions and member business loans.
- Reestablishing and clarifying field of membership rules that align with congressional intent.
“The legislative conversation over striking a reasonable balance between increasing credit union lending capacity and accountability, transparency and fairness should not begin and end with simply boosting the MBL cap,” Aiello said. “A more thorough discussion that leads off with reform will better serve taxpayers, the credit union industry, and other community financial institutions across America that constitute the financial backbone of this nation.”