SALT LAKE CITY – Even if it is an off-year with politickingunder way in the hotly contested governor's race, a panel of theUtah legislature appears ready to air credit union taxation onceagain. After an eight-month hiatus, the legislature's FinancialInstitutions Task Force created under the defeated 2003 tax-CU lawwas slated to conduct its first formal meeting in 2004 to examine“the status of the financial institution industry.” For some CUexecutives, that meant a forum for some of the leading CUantagonists, backed by the banking lobby, to rehash proposals forimposing a tax on CUs or lowering proposed taxing thresholds in2005 to create a divide between large and small CUs. The Task Forceis slated to make its recommendations to the 2005 legislature inJanuary. One of the co-chairmen of the House/Senate panel andauthor of the 2003 bill which would have levied first-timefranchise and “competitive equity” taxes of 35% on CUs is Rep. JeffAlexander (R- Provo). The 2003 law, which while dropping the taxproposal did bar business lending, led to an exodus by 10 state CUsto federal charters, and that group included most of the largest.Since then, some lawmakers – and the gubernatorial candidates –have been wary of stepping into the bank-CU fight with somelegislators agreeing with the Utah League of Credit Unions that the2003 law did great harm to the dual chartering system in Utah. TheLeague has urged lawmakers to “fix a broken system” in the 2005legislature. Slated to speak before the panel is Ed Leary, thestate's Commissioner of Financial Institutions, who was to discussfederal law changes impacting both state and federal charters. “Heis planning to respond to questions in discussing Regflex andCURIA,” said Orla Beth Peck, the chief CU regulator in hisdepartment referring to NCUA policies and the Credit UnionRegulatory Improvements Act due for House hearings in July. In themeantime, the League, which has been highly critical of the TaskForce's creation and procedure claiming it is a tool of the UtahBankers Association, once again said it “objects to the verycomposition and fundamental purpose of this panel” which is taintedby proponents of taxing CUs. -

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