With the Supreme Court decision on credit union memberships past, banks and credit unions are circling a key date on their calendars: March 9.
That is the day the U.S. Congress will begin hearings on a bill aimed at resolving the legal dispute over who can and cannot join specific credit unions.
“Although I’m disappointed by the outcome of the Supreme Court, this decision allows Congress to amend the law and clearly preserve consumer choice,” said Donald L. Hersman, president and chief executive officer of Miramar, Fla.-based Eastern Financial Federal Credit Union.
Hersman was attending a conference of the Credit Union National Association in Washington, where the group is seeking bipartisan support for the pending legislation, the Credit Union Membership Access Act.
“We will be encouraging all our members to contact their congressional representatives,” Hersman said. “Already, more than 17,000 Eastern Financial members have signed a petition supporting the act.”
Bankers say that’s fine with them, as long as credit unions pay a price, literally, by paying income taxes.
“There has to be some fair line in the sand,” said Glen Barton, Florida Bankers Association senior vice president. “If those conditions are met, there is no reason why they should not have to start paying taxes.”
The bill before Congress says nothing about taxes at the moment. Instead, it would broaden the legal meaning of “common bond” of employees or industries, so many Americans would be able to join credit unions without crossing laws or the federal courts.
“It’s the people’s right to have access to a credit union, and the (bill) amends a few words in the law to make it clear that it’s all right to add different groups of members,” said Kimberly Howes of the Florida Credit Union League.
Right now that bill has 168 sponsors, and the support of top ranking Republicans, including House Speaker Newt Gingrich, R-Ga., and Rep. James Leach, R-Iowa, who has scheduled hearings on the matter for March 9.
However, in the past, the American Bankers Association has said it would oppose such legislation if it did not force credit unions to pay taxes if they surpassed limits on asset size and took on commercial business.
And the bankers say they will insist on this stipulation during the hearings and beyond.
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