Last week the Senate Finance Committee put forth its version of tax reform. This comes on the heels of the House Ways and Means Committee doing the same the previous week. In both bills, no changes were proposed to the not-for-profit tax status of credit unions. The House Ways and Means Committee voted its bill out of Committee last week as well.
The fact that the CU tax exemption was not mentioned in Chairman Brady’s House bill nor the Senate Finance Committee bill is a big win for credit unions. This is a testament to our collective hard work on educating lawmakers as to why the CU tax exemption is still relevant and an important check and balance to for-profit banks. However, we know the bankers (ABA, ICBA) are not happy and will continue to work behind the scenes with their friends on the Hill to see if they can get CUs included along the way. For example, we’ve been told by two different tax staffers, one House and one Senate, that the bank lobby was circulating talking points about both credit unions and the Farm Credit System. Based on statements made by both bank trades after the Brady bill came out, I’d say there’s a theme here. We need to be on guard for amendments, both at the committee level, and/or on the floor. The battle is a long way from over.
Also last week, the Florida Supreme Court approved a proposed rule change to the Rules Regulating the Florida Bar that will allow attorneys to open their Interest On Lawyer Trust Accounts (in Florida known as IOLTAs) in credit unions. The proposed rule was initiated by the LSCU in January 2015 shortly after then-President Obama signed the Share Insurance Parity Act, allowing federal insurance to protect these accounts. The Florida Bar only proposes rule changes every other year, and once proposed, the Supreme Court must ratify them. While the rule was approved for change by the Bar’s Board of Governor’s last year, the Supreme Court chose to not take up any rule changes until today, when the rule was finalized. The League will begin working with the Florida Bar on education for credit unions interested in working on IOLTAs.
Where’s Patrick: On Monday afternoon our Executive Management team will be traveling to Melbourne for a meeting on Tuesday with Space Coast CU’s management team. I will then be flying to New Orleans for the AACUL winter meeting where LEVERAGE Benefits Group will be presenting to the group. I will fly back to Tallahassee on Thursday to participate in our annual FedPAC Quail Hunt fundraiser on Friday. To see my tentative schedule for the next two weeks, visit the LSCU Information for Credit Unions’ webpage.
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