Bank Super PAC Pushes Candidate Who Sought to Tax Credit Unions

Endorsement of freshman Iowa lawmaker Randy Feenstra raises some concern within credit union industry.

As the midterm election approaches, why would a banks-sponsored super Political Action Committee single out a little-known freshman House member from Iowa for its support?

Specifically, why has Friends of Traditional Banking urged bankers to contribute to the campaign of Rep. Randy Feenstra, R-Iowa, in lieu of much more high-profile pro-banker candidates?

Feenstra is the lone House member of the three candidates endorsed by the super PAC this year.

The answer to this mystery lies in the Hawkeye State, where Feenstra was chairman of the Senate Ways and Means Committee. In that position, back in 2018, the congressman pushed legislation that would have made credit unions subject to state taxation.

And now, if reelected, Feenstra has said he wants a seat on the tax-writing House Ways and Means Committee.

Why Credit Unions Are Concerned

Sources in the credit union industry said that combination of factors has them concerned.

In 2018, as chairman of the Senate Committee, Feenstra helped write a Senate tax bill that included the credit union tax. The House bill did not. As one might expect, the fight was high-pitched, with charges and counter charges being fired.

The Cedar Rapids Gazette quoted Feenstra as saying that the largest institutions in the state should pay taxes. And he had strong opinions about arguments being made by the credit union industry.

“It’s not going to increase anybody’s mortgage. It’s not going to increase anybody’s loan. That’s just being very disingenuous from the credit unions on what they’re trying to sell the public,” he was quoted as having said. “Frankly, I think they should be ashamed of what they’re saying because this is such a trivial amount of dollars to them.”

A compromise tax bill eventually was hammered out, with that measure ultimately leaving the credit union tax exemption intact.

Background on Feenstra

Feenstra was elected to the U.S. House in 2020, having defeated incumbent Republican conservative firebrand Rep. Steve King in the Republican primary and Democrat J.D. Scholten in the general election. He was appointed to the Agriculture, Budget, and Science and Technology committees.

In April, Feenstra spoke at the insurance industry’s Big “I” Legislative Conference, where he made his desire for a seat on the House Ways and Means Committee clear.

“I was chair of Ways and Means in the Iowa Senate,” he said, according to the Independent Agent news website, before mentioning some of the major issues considered by the committee.

“It’s so important that we look at those things,” he added. “And then you go downstream, whether it be trade—a lot of trade issues policies happen in Ways and Means—and then also health, most health policy happens in Ways and Means.”

This year, Feenstra’s opponent is Democrat Ryan Melton, who is being given little chance of winning in Iowa’s decidedly Republican 4th congressional district.

Support From Super PAC

Still, Friends of Traditional Banking isn’t taking any chances. “Representative Feenstra has been an outspoken supporter of taxing the largest, bank-like credit unions and now they are coming after him,” the group says on its website. “We simply MUST send a loud message of support ASAP!”

“Feenstra is being bashed by credit unions who remember what he did to them at the state level and are petrified of what he may do if he stays in Congress,” the super PAC states. “By supporting Feenstra, FOTB leadership wants to send a loud and clear message that if you have our back in Congress, we’ll have yours.”