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Minutes for SB259 - Committee on Financial Institutions and Insurance
Short Title
Privilege tax deduction for net interest on certain business and single family residence loans.
Minutes Content for Wed, Jan 22, 2020
Chairman Olson resumed the hearing on the bill.
Chairman Olson called upon Brad Douglas for primary opponent testimony on the bill.
Mr. Douglas explained the difficulty of comparing credit unions and banking. He introduced Stephanie Mullholland who explained why she felt that the bill is bad policy. She stated she opposed the bill on the basis of fairness and a level playing field.
Chairman Olson called upon John Beverlin for opponent testimony.
Mr. Beverlin claimed that credit unions and banks were not held to the same standard. He asserted that credit unions pass the benefits to it shareholders, while the banks pass the profits to it stockholders. (Attachment 2)
Chairman Olson called upon Brandi Miller for opponent testimony.
Ms. Miller stated that coops are different because they are member owned/controlled and are governed by their members.
Chairman Olson called upon Mike Augustine for opponent testimony.
Mr. Augustine asserted that banks have the right to choose the corporate structure. He claimed that the bill would "unlevel the playing field." (Attachment 4)
Chairman Olson called upon Joe Deneke for opponent testimony.
Mr. Deneke claimed that credit unions and banks deal with two different types of customers. He pointed out that credit unions make loans to the part-time farmer, while the bank is more interested in the large operation. He continued that the bank is not interested in structuring a loan to the needs of that farmer. (Attachment 5)
Chairman Olson called upon Brenda Kliewer for opposition testimony.
Ms. Kliewer accused banks of wanting all the advantages of a credit union without complying to the limits of a credit union. She said she opposes the bill on the basis of accountability and fairness. (Attachment 6)
Chairman Olson called upon Kevin Wilmoth for opponent testimony.
Mr. Wilmoth claimed that credit unions are more interested in the individual than a bank. He asserted credit unions are more dedicated to helping its members versus being interested in generating profits. He suggested that if banks want to enjoy the tax status of a credit union, then it should become a credit union or a mutual bank. (Attachment 7)
In response to committee questions and comments the following points were established:
- Credit unions are limited based upon membership.
- Credit unions are unable to accept public entity deposits.
- A credit union conferee claimed that banks have seventeen times the exemptions as do credit unions. A committee member requested documentation of the this claim.
- A credit union conferee claimed that out of 44,000 loans that 16,000 were less than $100 loans, 26,000 were less than $1,000 and hundreds were less than $2,000.
- A claim was made that without the non-profit status of credit unions many people would be un-banked.
Opponent - Written Only:
Rob Smeltzer, Envista Credit Union (Attachment 8)
Greg Winkler, Azura Credit Union (Attachment 9)
Michael Taylor, Catholic Family Credit Union (Attachment 10)
Eileen Phelps, Credit Union of America (Attachment 11)
Chairman Olson suspended the hearing at 10:30 am.
