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October 30, 2003 <br />Page Two <br /> <br />to attract customers away from the local bank, and thereby ~ttract assets away from the <br />tax base that benefits your locality. Lest you think I am overstating the situation, let me <br />cite a few facts from the VCU study. Deposit growth at tax-exempt credit unions is now <br />almost double that of banks. With the erosion of any meaningful common bond <br />membership restrictions, 65% of Virginia's population now belongs to a credit union, and <br />that figure is growing yearly. In 1996, lost tax revenue from tax-exempt credit unions in <br />Virginia was $82 million. This doubled to $168 milIion by 2002; and with the aggressive <br />growth strategies of today's credit unions, the figure will likely double several times over <br />in the years ahead. <br /> <br /> Credit unions require the same services fi.om your local government as anyone <br />else - roads, water and sewer, police and fire protection, schools and teachers to educate <br />their employees, etc. Having decided to leave behind their original purpose of serving <br />the underserved in order to compete in the open market, why should credit unions not pay <br />the same taxes as alt other competitors? We continue to communicate to our state and <br />federal legislators that a change in public policy is badly needed, and that with the current <br />revenue crunch, now is the time to fix the problem. We hope you might agree. <br /> <br />Sincerely, <br /> <br />Walter C. Ayers <br />Executive Vice President <br /> <br />WCA/sk <br /> <br />Enclosure <br /> <br /> <br />