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Richard Piatt ReportingUtah's Legislature is once again inundated with pressure from both banks and credit unions over a fight to tax credit Union profits. The fight is all about taxing the profits of Credit Unions---a fight that's out of the state's hands.
The big deal is a resolution, a non-binding message Utah would send to Congress. It’s a message banks want to send, but that Credit Unions don't. At the Capitol these days at least two dozen people from both banks and credit unions are lobbying over a simple message to Congress. Credit Unions are also paying for ads, trying to get the public involved in the fight.
Even so, the House Tuesday approved HJR1, a resolution that simply makes a statement that Credit Unions be taxed like banks.
Scott Simpson, Utah league of Credit Unions: "Banks are making money hand over fist in this state. And yet they want to legislate away a non-profit alternative to consumers. And that's why it's a big deal."
The fight is amazingly sharp, considering the resolution is non-binding. Even so, both sides are engaged.
Howard Headlee, Utah Bankers Association: "It's a resolution that doesn't change the law. And they're pouring a huge amount of their members’ resources into this when it's clearly a federal issue."
Over the last few years large credit unions have avoided the issue in Utah by switching from a state charter to a Federal charter. That changes whose law Credit unions have to obey. And the same thing is happening in other states. Meantime in Utah and across the nation, Credit Unions are growing---so much that banks question their tax-exempt, non-profit status.
Eventually it will be up to Congress to sort what's right and what's not under the Federal charter. But in Utah, the fight has boiled down to a resolution to Congress: A conclusion drawn from a two-year task force headed up by House Majority leader Jeff Alexander.
Rep. Jeff Alexander, House Majority Leader: "They probably don't want to open that box, but need to. People are looking for direction all over this country."
This fight is evolving from a sqabble over profits into a huge battle in Washington. The tit-for-tat here is just the beginning of what could be a major issue in the future.
