Legislature to get CU issue
The Legislature's Financial Institutions Task Force on Tuesday voted 7-4 to bring to the full body a resolution calling for the U.S. Congress to look into various aspects of the matter and "take appropriate action."
At issue is whether federally chartered credit unions should face the same tax obligations as state-chartered credit unions and banks. In the wake of rancor over state-chartered institutions' growth and tax issues during the past few years, many have switched to the federal charter.
Tuesday's meeting was relatively brief, but several lawmakers hinted at what's to come. Rep. Michael Noel, R-Kanab, noted that the matter has divided task force membership. "We're going to get into this same possible divisiveness when we get into the Senate and the House again," he said.
Rep. LaVar Christensen, R-Draper, said he is "so disappointed that this issue has become, for whatever reasons, a political football."
Still, he said he is optimistic that the resolution will be refined in the Legislature and will be beneficial. "I think it's substantially a good jumping-off point (now), and I think that the process will make it better," he said.
Rep. Jeff Alexander, R-Provo and co-chairman of the task force, said he wants Congress to "give us direction" about the National Credit Union Administration's actions that have led to expanded federally chartered credit unions. The resolution asks Congress to determine if NCUA rulings have been "over-broad" by allowing that expansion.
Christensen said he wants "to do the right thing for the right reason" and that "there's no sinister people or motives in any of this.
"I think that to go off and think our goal is to somehow create a level playing field or to reconcile competing claims between two business constituencies, I think our task is a lot more noble than that," he said.
Nonetheless, Christensen noted that credit unions have had a tax exemption for decades.
"Now we've gotten used to it. Maybe we've got squatters' rights. Maybe we've got something we are so used to, and you try to take anything away that has existed that long, it's like taking candy right out of a baby's mouth and they like it. So every time we have this decision, we say, 'Why? Give us a good reason — not just because, not just because you like it or because you've gotten used to it, and not because some other group is saying, take it away.' "
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