ADA, Tax Status, CDFIs in Addressed in CUNA Letters to House Appropriators

CUNA raised several credit union issues as House Appropriations sub-committees began hearings on federal agency budget requests for fiscal year 2020 this week.

It submitted letters for the record Tuesday of hearings involving the Department of Justice, Department of the Treasury and the Internal Revenue Service.

Department of Justice (DOJ)
CUNA and its members have grown increasingly concerned with frivolous litigation spreading due to a lack of clarity with how the Americans with Disabilities Act (ADA) applies to Web sites the letter concerning the DOJ read.

“On several occasions, CUNA has recommended the Department initiate a process to solicit input from stakeholders with the goal of issuing a clear ADA Web site accessibility standard for which credit unions and other entities can comply.  It is also essential for the Department to clarify whether Web Content Accessibility Guidelines (WCAG) 2.0 is the appropriate compliance standard, as some courts have held, and if entities must also adjust to any subsequent amendments made to WCAG.  Additionally, credit unions need clarity about whether Web sites are in fact considered public accommodations since there has been conflicting case law on this issue.”

CUNA also wrote to Attorney General William Barr shortly after his confirmation to detail the issue and urge the DOJ to provide a solution and has worked with the National Federation of the Blind to find solutions for issues surrounding the ADA while also increasing access to economic opportunities for blind individuals.

Internal Revenue Service (IRS)
CUNA reiterated several points from its new white paper on the importance of the credit union tax status, and also noted several concerns with provisions in the Tax Cuts and Jobs Act (TCJA).

The bill imposes an excise tax on certain executive compensation provided by tax-exempt organizations. For-profit compensation agreements in effect on or before Nov. 2, 2017 are not affected by this excise tax, but no such provision exists for the not-for-profit sector.

“This amounts to a retroactive tax on the nonprofit sector as these contracts were agreed upon with certain tax considerations assumed,” the letter reads. “CUNA and the nonprofit sector are deeply concerned about this lack of parity.”

It also highlights concerns about TCJA’s extension of Unrelated Business Income Tax (UBIT) to certain employee fringe benefits.

“The definitions and IRS guidance regarding this provision is severely lacking in substance and clarity, the letter reads. “Absent a clear repeal of this provision in the TCJA, a delay in its implementation would hold these tax-exempt employers harmless until they have clear instructions on how to file.”

Department of the Treasury
CUNA strongly supports the Treasury’s Community Development Financial Institutions (CDFI) Fund, which makes grants and other awards to certified CDFIs. As of March 31, credit unions are 289 of the 1,074 certified CDFIs nationwide.

CUNA noted two examples of the grant money bring used to leverage “significant amounts of private and non-federal dollars:”

  • Appalachian Community FCU, Johnson City, Tenn., secured a $2.1 million CDFI grant two years ago to provide assist over 200 families in its community $10,500 down payments assistance loans. This grant was leveraged to enhance homeownership, thus providing a broader tax base as well as providing work for the construction sector and local businesses that provide services to that sector; and
  • St. Louis Community CU, St. Louis, Mo., received a financial assistance grant from the CDFI Fund in 2013 to help launch a program to provide affordable car loans to low- and moderate-income individuals and families. This $849,000 grant was leveraged into over $22 million in auto loans.