By Vicki Needham - 10/07/10 06:30 PM EDT
Without the help from the NCUA, credit unions would have had systemwide losses of an estimated $40 billion and as many as 30 percent of federal credit unions would have failed, Fine said in the letter.
The NCUA moved bad assets to a trust that will set government guaranteed notes that could lower losses to between $8.3 billion and $10.5 billion, instead of $40 billion, Fine wrote.
"This is an affront to taxpayers and to the community banks that sustain their communities and the nation with hard‐earned tax dollars," the letter said. "Community banks pay their fair share, we ask that credit unions be held to the same standard."
The takeover put 70 percent of all credit union assets under conservatorship, and the NCUA's intervention prevented the sale of $50 billion of subprime and mortgage‐backed securities at steep losses, preventing the widespread failure of consumer credit unions, according to ICBA.
"Credit unions not only do not pay tax, but when they are troubled, they get a taxpayer bailout," Fine wrote. "They benefit from taxpayer resources when times are rough, but they do not contribute when they are profitable."
He said "at a time of record deficits, every dollar of revenue counts. This consideration alone makes a strong case for repealing the tax exemption for credit unions."