Credit Union Taxation Compromise

Trapped in the NCUSIF

In addition, because the group provides substantial support for NCUA and the NCUSIF, the legislation may include prohibitions on leaving the NCUSIF, in order to preserve the safety and soundness of the fund. (The precedent: savings banks were prevented from leaving the Savings Association Insurance Fund (SAIF).) Credit union trade associations are likely to consider it "noble" to negotiate such a "compromise". Consequently, the many credit union executives that threaten to convert to a bank, if taxed, may find themselves trapped in a less desirable "credit union like" charter.