Rep. Rob Wittman (R-1) once again pledged his support of the credit union tax exemption and promised a letter on qualified mortgages to the National Credit Union Administration (NCUA) when Representatives from 1st Advantage Federal Credit Union and BayPort Credit Union met with him Monday in his district office.
Wittman noted that as a 28-year member of a credit union, he understands full-well the benefits of the Credit Union Difference.
“The current niche of credit unions and the tax exemption are reasonable. You are fulfilling a need and there is a value to the nation for continuing the tax exemption. I’ve seen the benefit first-hand.”
Mike Flanary of 1st Advantage, who also chairs the League’s Governmental Affairs Committee, addressed the argument from bankers about credit unions hurting them unfairly in the marketplace, leading to the banking lobby objecting to all credit union-specific bills as well as their tax exemption. Flanary brought press releases from community banks in his area touting net profit increases soaring in the double digits.
He then segued into H.R. 688, the bill to raise the cap on member business lending. BayPort’s Stan Leicester, who serves on the League’s Board of Directors, said his credit union is at 82 percent of the cap, explaining “It would be an awful shame to cut off our member business lending” because of the current stingy cap.
Wittman said that he has spoken with House colleagues and there is not a lot of interest in increasing the cap. While credit unions argue that they lend to small businesses that banks won’t take on, Wittman said it boils down to equity on the playing field, not who is lending to whom.
“The question becomes how to increase the cap that reflects what you do and maintain equitability,” the Congressman said. He said he will continue discussions on MBL with colleagues.
Everyone in the meeting agreed on burdensome regulation affecting financial institutions. Wittman said there has to be a general framework of regulation and transparency but too much regulation squeezes the margins and makes it difficult to stay in business.
“You’ll never hear me say that credit unions are under-regulated,” Wittman said.
Leicester expressed great concern about regulations defining qualified mortgages and whether credit unions will be able to continue to offer mortgage products wanted by their memberships. Wittman said he is very concerned about the future of mortgage products, too, because of the QM rules.
“If it takes the 30-year mortgage off the market, a lot of people won’t get mortgages,” he said.
Wittman offered to write to regulators on the QM concerns and remind them of their ability to be flexible in implementing the rule.
Others attending the meeting were: John Sargent (1st Advantage) and Jim Mears and Jennifer Coyne (both of BayPort), as well as the League’s Karin Sherbin.
EDITOR'S NOTE: You can ensure your voice is heard on preserving the credit union tax exemption by contacting Sen. Mark Warner, Sen. Tim Kaine, and your congressman today by visiting www.donttaxmycreditunion.org. Follow the discussion on Twitter at #donttaxmycu.
The fight for an increase in the member business lending cap is a tough one, but also a critical one. We've made the public policy arguments - even the Treasury Department agrees the cap increase makes sense - but to win, it's going to take us constantly hammering home the message that cap makes no sense at the present level. You can write federal lawmakers in support of the MBL cap increase here: