Less than a month after national credit union movement preservedits federal tax exemption under the new tax law, bankers are tryingto split the movement by targeting larger credit unions for a newtax in Iowa.

The Iowa Bankers Association is airing television and radio adscalling for credit unions to be taxed, with rhetoric that paintscredit unions as tax evaders.

One spot depicts a young white middle class couple at their homewith two children. It says the average Iowa family earns $55,000and pays $7,000 in income taxes. “Meanwhile, just one Iowa creditunion makes $57 million a year. This big credit union, one of thelargest in the state, pays nothing in income taxes. Absolutelynothing.”

“It's time for an Iowa tax code that's fair. Let's end thecredit union industry's free ride.”

The credit union is not identified, but $57 million matches 2016net income for the state's largest credit union: University of IowaCommunity Credit Union of North Liberty, Iowa ($4.5 billion inassets, 165,295 members).

Altogether, Iowa's 93 federally insured credit unions had $138million in net income in 2016, and a 0.86% return on averageassets. Assets were $16.9 billion on Sept. 30, up 11% from a yearearlier.

The Iowa Credit Union League has produced its own 30-secondanimated spot, pointing out that Iowa banks paid out $500 millionto shareholders, while Iowa credit unions save their members $100million a year in lower fees and better interest rates.

“If you think banks and credit unions are the same, rememberthis: One is run for profit, the other is run for you.”

The last battle in Washington ended last December when Congress let stand thelongstanding federal tax exemption for credit unions whose profitsbelong to their member owners. But the issue continues in politicalstruggles taking place in states across the nation.

In Iowa, the latest battle for public perception began when thelegislature convened Jan. 8.

Republicans in Iowa control the executive and legislativebranches, with 29 of 50 members of the state senate and 59 of 100members of the state house. Until the 2006 election Iowa had one ofthe nation's most evenly split legislative branches.

Republicans have traditionally controlled the governor's officein Iowa since the Civil War. The exceptions have been during thepopulist wave of the 1890s, the Great Depression of the 1930s, mostof the 1960s, and 1999 to 2011.

The Iowa Credit Union League hasn't yet talked with RepublicanGov. Kim Reynolds, who took office last year, but she is scheduledto speak Feb. 6 at the league's Legislative and Regulatory IssuesConference.

Justin Hupfer, the league's vice president of governmentaffairs, said about 1.1 million Iowans belong to credit unions. “Atax on credit unions is ultimately a tax increase on the membersthat own it. ,” he said.

“Her efforts have been focused on trying to let Iowans keep moreof their money, and reduce their tax burden,” he said. “Our hopewould be that the bankers' effort to raise our taxes would becontrary to her goals.”

Iowa credit union leaders have been writing op-eds and reachingout to their members through emails and newsletters, asking them tocontact their legislators. The league's website says 5,000 havesent letters so far.

Richard Gose, CUNA's chief political officer for advocacy, saidbanks efforts to undermine credit unions ebband flow at the state and national levels, sometimes at the sametime.

This year those efforts might intensify becausemany states are pursuing tax reform, and banks are quick to offerup credit unions as source of new revenue. Some of the states CUNAis watching include Oregon, Washington, Illinois, South Carolina,Kansas and Missouri.

”We will do whatever we can to defend credit unions against bankattacks,” Gose said.

However, the Iowa Bankers Association has “taken it to anotherlevel,” Gose said. “What's going on in Iowa is a full-courtpress.”