POSTED: Thursday, July 18, 2013 - 4:51pm
UPDATED: Thursday, July 18, 2013 - 5:18pm
Although it is going down right now, the national deficit is a huge problem.
And one large, national group says it can help.
Just tax another large national group.
There is a battle going on in Washington right now between financial institutions.
You might even say it’s of biblical proportions.
Well, at least it involves one bible story.
Think David and Goliath.
“Credit unions in America have 6% of the financial pie. Banks have 94%. I dare say, that is not going to have a huge impact on the deficit,” says Scott rose, President of Kelly Community Credit Union.
The fight is over taxes.
Banks pay them, credit unions don’t.
And that is a policy that is 76 years old.
Most credit unions were originally by companies for small loans to employees.
And since 1937, credit unions have been exempt from corporate income taxes since they are non-profit.
But the American Bankers Association wants Washington to change that.
“Credit unions have morphed into these bank-like creatures that anybody who can walk in the door or go online can join that credit union and get bank services, consumer lending, trust services, ATM’s, everything like a bank. And they pay no federal income taxes,” says John Heasley of the Texas Bankers Association.
“Technically, the reason we should not be taxed has nothing to do with that. It has everything to do with why were we created? We were created as a not for profit, financial cooperative,” says Rose.
“I think that they are using the non-profit status to act like a bank,” Heasley responded.
Bankers have written the President to request what they call a level playing field.
Credit unions maintain they are more limited and conservative, while banks are for profit institutions and have much more leeway in their investment practices.
They say, we saw the results of that in 2007 with the bailout.
The bottom line is, will Congress vote to tax credit unions?
Most observers say, there’s a better chance of an Astros World Series this year.