After scoring a victory in the Iowa House's tax reform plan, credit union leaders across the state and Quad-City region pledged Thursday to continue working to be heard in Des Moines.
On Wednesday, the House Republicans rolled out a tax plan that did not include changes on how banks and credit unions are treated as an earlier tax plan by the Senate did. The House and Senate leaders now will begin negotiating a single tax cut bill.
Iowa's bankers have sought changes they say would level the playing field between for-profit banks, which pay income taxes, and the nonprofit credit unions, which are exempt.
"We feel through our advocacy we were able to prevent it from being in the House plan," said Dale Owen, the president and CEO of Bettendorf-based Ascentra Credit Union. "But we're not letting up... We're not taking anything for granted."
On Thursday, the tax reform bill passed the House Ways and Means Committee, which made no changes to the credit union taxation issue.
"It's a victory from the standpoint of credit union members not getting their taxes raised," said Justin Hupfer, the vice president of government affairs for the Iowa Credit Union League. "But nothing is done until the session adjourns."
Pat Drennen, CEO and president of 1st Gateway Credit Union, in Clinton, has been focused on educating his local legislators to understand his industry as well as educating the credit union's membership. While most of the attention has been on the state's larger credit unions, which are gaining in market share, he said "(The banks) are trying to divide and conquer the credit unions between big and small."
Credit unions, which are owned by their members, have argued they already pay taxes, including a monies and credits tax on their reserves as well as property taxes, sales taxes and payroll taxes. Any additional taxes "would be a direct tax on the people who do business with credit unions," Owen said.
But Joe Slavens, the president and CEO of Northwest Bank, Davenport, said the same could be said for any business. "All costs get passed onto customers... that's the way the free market works."
Owen said because credit unions are doing their job and gaining more members, they are providing competition for the banks. "At the end of the day, there is room for both of us."