Banks vs. Credit Unions Battle Back in House

Banks vs. Credit Unions Battle Back in House

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John Daley ReportingA perennial debate is back--Utah's banks and credit unions are battling again. New ads on TV are taking up the fight and so are lawmakers on Capitol Hill. The latest fight even invokes the President of the United States and the US Congress.

Ad: "They all support the tax exempt status of not for profit, member-owned credit unions. So why are Utah banks trying again to tax your credit union?"

Utah's House Majority Leader calls the ads "misleading."

Rep. Jeff Alexander, (R) House Majority Leader: "They've also been telling us the legislature is at it again in trying to tax Utahns, that's not true. That's falsehood and yet they continue to run the ads."

In 2003 lawmakers passed a bill that imposed taxes on large credit unions, similar to those banks. In response many credit unions abandoned their state charters for federal charters, costing Utah millions in tax revenue. Today House lawmakers were wrestling over the language of a bank-supported resolution urging Congress to examine the tax status of federally-chartered credit unions.

Scott Simpson, Utah League of Credit Unions: “This is not an issue that the legislature needs to be spending a lot of time on. There are not banks in crisis, and clearly not at the expense of credit unions. And it doesn’t justify the attention our legislature has given it.”

Howard Headlee, President, Utah Bankers Association: “I think what everyone recognizes is that things have changed. Some credit unions have really changed. And there has to be equity for both credit unions and banks to survive and thrive.”

In the Republican-dominated House votes were close on the resolution, perhaps a reflection of a lingering fatigue with the issue.

Rep. Paul Ray, (R) Davis County: "I've gotten several hundred emails in the last couple of days, phone calls and visits to my home, from people who just want it to go away. Just get rid of it. Let's move on to other things. Because they've seen it since 1998, it's been on-going. And they're tired of it and they want us to do something different."

The battle will continue another day as the House today put the issue on hold. The bank and credit unions fight on this resolution may resume as soon as next Monday.

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