Could House GOP Oversight Plan Include CU Tax Exemption?
It's clear newly formed House financial committees with target the CFPB, but less certain how they will approach the credit union tax exemption. Learn why.
Newly formed House financial committees begin to unveil plans and priorities for upcoming Congress.
As House committees start to take shape, it’s clear that Republicans are targeting the CFPB for intense oversight, but could the credit union tax exemption also be a subject of renewed scrutiny?
Late last week, new House Ways and Means Committee Chairman Rep. Jason Smith, R-Mo., appointed Rep. Randy Feenstra, R-Iowa, an avowed credit union critic, to the key subcommittee overseeing tax policy.
The move came as the committees began to organize and outline plans for the 118th Congress.
On Wednesday, the House Financial Services Committee is scheduled to hold an organizational meeting to adopt the panel’s rules and an oversight plan, which will provide some hints about the subcommittee’s priorities during the next two years.
The Subcommittee’s Oversight Plan
For instance, the plan states that the subcommittee will examine the funding mechanism and structure of the CFPB. Republicans have long argued that the agency should be subject to the annual appropriations process and that it should be governed by a commission rather than a single director.
At the same time the committee is examining the agency’s governance, the U.S. Supreme Court is reviewing an appellate court ruling that found the agency’s structure unconstitutional.
The plan also states that the panel will, once again, examine the National Flood Insurance Program—a federal initiative whose authorization expired in 2017. It has since been governed by short-term extensions, with the latest one set to expire on Sept. 30.
And while the Financial Services Committee under Democratic control argued the virtues of a carefully controlled regulatory regime, the GOP majority has made it clear that it intends to take on a more deregulatory stance.
“The Committee will continue to review the current regulatory burden on financial institutions, particularly community financial institutions, with the goal of reducing unnecessary, duplicative, or overly burdensome regulations, consistent with consumer protection and safety and soundness,” the oversight document states.
House Ways and Means Committee Plan
The Ways and Means Committee is scheduled to hold its organizational meeting today, but the panel has not yet released any details of its plans.
Feenstra has also not commented on the credit union tax exemption since his appointment to the Ways and Means subcommittee.
However, as a state legislator in Iowa, he sponsored legislation to abolish the state tax exemption for credit unions. In 2022, he was endorsed by Friends of Traditional Banking, a super Political Action Committee that vehemently opposes the credit union tax exemption.
As this blog has reported, Feenstra, according to the group, said, “I’m not afraid to call out the largest credit unions who are behaving like banks. Thanks to Friends of Traditional Banking, we can take the fight to them!”
So far, Feenstra has not made his intentions clear. He also is a member of the House Agriculture Committee and, with the farm bill up for reauthorization, many of his public statements to date have focused on that issue.