FROM THE OFFICE OF PUBLIC AFFAIRS

The Treasury Department today released two congressionally mandated reports on credit unions, Credit Union Membership Business Lending and Comparing Credit Unions with Other Depository Institutions, both were prepared in response to the Credit Union Membership Access Act, which President Clinton signed into law on August 7, 1998.

In the report, Credit Union Membership Business Lending, Treasury surveyed all 1,514 credit unions that carried member business loans on their books as of June 30, 1999. The report finds that few credit unions are active business lenders. As of June 30, 2000, only 92 of 10,337 credit unions had total member business loans outstanding exceeding their net worth. While this group comprises less than one percent of credit unions, they account for over 46 percent of the unpaid principal balance of all member business loans. The report also finds that over half of all member business loans are collateralized with non-agricultural real estate, and rental properties make up one-third of the dollar volume of all member business loans.

In preparing the second report, Comparing Credit Unions with Other Depository Institutions, Treasury compared the federal regulations and statutes applicable to credit unions with those applicable to other federally insured depository institutions, focusing on such areas as safety and soundness, consumer protection, and the product offerings of these different institutions. The report also reviews the history of credit unions' exemption from the federal corporate income tax and estimates the potential revenue that could be raised were Congress to remove that exemption (between $13.7 billion and $16.2 billion over a ten-year period). Finally, the report outlines the steps taken during this Administration to promote the viability of small banks and discusses the tax policy principles that must be satisfied to expand bank eligibility for electing Subchapter S status.

These reports are available on Treasury's web site at www.treas.gov