NH Bankers Ask For Repeal of Credit Union Tax Exemption

The New Hampshire Bankers Association (www.nhbankers.com) (NHBA) board approved a new resolution urging NH’s Congressional delegation to support the repeal of the tax exemption from corporate income taxes for credit unions. Leaders with the NHBA said that the association would also soon be asking each of its member banks to individually ratify the resolution.

The resolution follows the release of a new market study that showed a slanted playing field for taxation and regulation between banks and credit unions, which the NHBA says impairs their members' ability to compete in the financial services market place without the tax and regulatory benefits enjoyed by credit unions. Banks are required to pay both Federal income taxes and the NH Business Profits Tax, and to participate in the Community Reinvestment Act (CRA), requiring banks to make community development loans in underserved markets. Credits unions are exempt from paying any corporate income taxes and are not required to comply with CRA.

The NHBA is asking its member banks to individually ratify the resolution, calling for tax parity among depository institutions, and to subject credit unions to the same regulatory oversight and compliance standards mandated for banks. Mark Primeau, chair of the NHBA, said, “New Hampshire’s banks have shown a stronger commitment to the state’s underserved markets – far outpacing credit unions in servicing our poorest communities. Banks do so while also paying up to one-third of their earnings in taxes  There is no reason to unfairly grant credit unions – which have grown larger and generate more income than banks – special treatment when they fail to meet their original mission.

Christiana Thornton, president/CEO of the NHBA, said, “Credit unions should not be rewarded with a huge tax subsidy for doing less for needy communities, and then use that money to unfairly capture market share from New Hampshire banks. No. This resolution very clearly calls for an end to the inequitable tax treatment and to credit union mission creep.”

Representatives from the NHBA  plan to visit New Hampshire’s Congressional delegation again this month and deliver the resolution.