Credit Union Critic Feenstra Appointed to Tax-Writing Panel

Congressman who opposed state credit union tax exemption named to House Ways and Means Committee.

Rep. Randy Feenstra, R-Iowa, an outspoken opponent of the state credit union tax exemption when he served in the state legislature, has been appointed to a seat on the tax-writing House Ways and Means Committee.

While Feenstra has yet to set his sights on the federal credit union tax exemption, he has made it clear that he believes credit union tax exemptions are unfair.

“I’m not afraid to call out the largest credit unions who are behaving like banks,” Feenstra was quoted as saying by the bank super PAC Friends of Traditional Banking during an October 12 conference call.

Background

Feenstra was one of three House and Senate candidates the super PAC endorsed last year. While a super PAC cannot contribute directly to a candidate’s campaign, it can urge others to do so and spend money independently of a candidate.

Feenstra’s appointment came as the House Republican Steering Committee announced its selections for House committees. Those selections still must be ratified by the full GOP House Republican Conference and approved by the House.

The selections included 11 new members appointed to the House Financial Services Committee. Controversial Rep. George Santos, R-N.Y., who is under federal investigation and admitted that parts of his resume are false, was not among those named to the panel. He had expressed an interest in being appointed to the committee.

Feenstra and the CU Tax Exemption

No current lawmaker has indicated a willingness to take on the credit union tax exemption issue.

When he was chairman of the Iowa Senate Ways and Means Committee, Feenstra led an effort to try to change the state exemption.

“In recent years, Iowa’s big credit unions have increasingly acted like banks,” he told the Des Moines Register at the time. 

“We have the local credit unions in each community, which are wonderful, doing a great job,” Feenstra said. “Then we have some very significant credit unions trying to cannibalize business in these small towns, going after the small credit unions and small banks.”

Financial Services Committee Shakeup

Among those appointed to the Financial Services Committee was Rep. Byron Donalds, R-Fla., who members of the conservative House Freedom Caucus had nominated for House Speaker last week.

As might be expected, committee chairman Rep. Patrick McHenry, R-N.C., said he was pleased with the new Republican members, adding, “From oversight of the Biden Administration, to enhancing capital formation opportunities, to developing clear rules of the road for digital assets—we have a lot of work to do.”

In particular, McHenry has made it clear that a major target of his committee’s oversight will be the CFPB and its director Rohit Chopra.

“The days of Congress giving Director Chopra a free pass for his reckless actions have come to an end,” he said. “Committee Republicans will finally ensure Director Chopra and the CFPB are held accountable.”

Proposed CFPB Registry Under Fire

The immediate target of McHenry’s anger is a CFPB proposal to establish a public registry of nonbank terms and conditions that are included in contracts.

Those terms and conditions, the bureau said, “claim to waive or limit consumer rights and protections, like bankruptcy rights, liability amounts, or complaint rights,” and, “In some cases, terms and conditions in non-negotiable form contracts mislead consumers into believing the terms or conditions are legally enforceable.”

The proposed rule, announced Wednesday, would require nonbank companies subject to CFPB supervision to submit information that would be made public.

“Some companies seek to censor their customers and strip them of their rights by inserting fine print into non-negotiable contracts,” Chopra said. “The CFPB is proposing a registry of these contract clauses to find out where people are unable to speak up when they’ve been harmed.”

McHenry accused Chopra of exceeding his authority—a frequent criticism leveled by McHenry.

“This is another attempt by Director Chopra to unilaterally expand the CFPB’s authority beyond Congress’ intent and to mandate what Democrats were unable to legislate,” McHenry said. “Requiring nonbank financial firms to register publicly with the Bureau is unprecedented—no other industry is required to make public such detailed contract information.”