A movement started in Florida called “Hike the Hill” is drawing its sights on Capitol Hill in Washington, D.C. The Credit Union National Association (CUNA) is fighting against the removal of a federal tax exemption for credit unions across the nation. The debate has been in the public arena for years as lobbyists employed by the big banks have pushed for the credit union tax exemption to be repealed.
In early 2013, the American Bankers Association released advertisements targeting credit unions. The Association went so far as to personally request Congress and President Obama to repeal the exemption. The ABA has argued that removing the exemption is in line with the growing status credit unions hold in the financial sector and should be taxed as banks are.
However, credit unions only hold six percent of all financial assets in the U.S. whereas banks hold a massive 93 percent. Also, the ABA fails to mention that 96 million Americans currently hold credit union membership, much less than banks. In 1934, the Federal Credit Union Act was established to provide credit unions their tax exemption as they operate much differently than traditional banking institutions. Congress will be determining what will be done with the exemption in the coming weeks.
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