PORTFOLIO Senate Finance Committee chairman Orrin Hatch (R-Utah) leaves a news conference following the Senate Republican policy luncheon at the U.S. Capitol on April 17. Checks and Balances By Chris Cole, ICBA Tax exposure Congress is suddenly raising red flags on the credit union tax exemption. fter being largely ignored by Congress during the tax reform debate of 2017, the credit union tax exemption is suddenly getting a lot of attention on Capitol Hill. Senate Finance Committee chairman Orrin Hatch (R-Utah) is raising questions about the costly exemption as he prepares to retire, and the credit union industry's response seems only to raise further questions. Most recently, Hatch called for large credit unions to report financial information to the IRS like other tax-exempt institutions. In an April letter to IRS acting commissioner David Kautter, Hatch wrote that current laws requiring tax-exempt organizations to annually file Form 990s 32 Q ICBA Independent Banker Q June 2018 A Chris Cole (chris. cole@icba. org) is ICBA executive vice president and senior regulatory counsel help ensure they operate within the scope of their tax-exempt purpose. ICBA said it was a great idea. Amid concerns that credit unions have grown beyond their statutory mission of serving people of modest means with a common bond, requiring at least some of them to report to the IRS would provide needed information on how these financial firms are using their tax subsidies. Overreliance on subsidies Hatch released his proposal at the same time that news broke of a startling admission by National Credit Union Administration (NCUA) chairman Mark McWatters. Responding to concerns that Hatch raised earlier this year, McWatters acknowledged in a letter that eliminating the credit union tax exemption would create a " safety Photo: Chip Somodevilla/Getty Images