According to political observers, a proposal resulting in taxes affecting just 10% of the credit unions is plausible. Although numbering less than 1,000, these credit unions are the most profitable and fastest growing. Controlling about 75% of credit union assets, their profile deviates from the median credit union. Many are capturing market share from the smaller 6,800 credit unions, alienating that group. Without their support and facing critics at the highest levels of government, this small group of fast growing credit unions (likely re-characterized as "credit associations") may end up getting squeezed into a box resulting in taxation and only modest new powers. Mutual savings banks had to wait over 20 years after being taxed before gaining any significant new powers.
Credit Union Taxation Compromise
Since HR-1151 streamlined the process of converting to a bank charter, members have overwhelmingly supported the move, regulatory approvals have been swift, and the pioneering institutions have prospered. The voting process is simpler than converting to private insurance since only a simple majority of members voting need to approve of the move; and the NCUA board's approval is not required.
Advice from Stephen R Covey's book: "First Things First" may apply for some facing the bank conversion decision: (1.) "Let go of paradigms that are popular and pleasing, but based on illusion". (2.) "Let go of extrinsic sources of security".