Regarding Albert Crenshaw's May 16 Business story, "Bankers Want to Repay Credit Unions":

We want to clarify that when not-for-profit cooperatives -- such as credit unions -- have competed directly with the private sector, they generally have been taxed. Mutual insurance companies, for example, lost their tax exemption in 1942. Mutual savings banks and mutual savings and loans lost their exemptions in 1951.

Continuing the tax exemption for credit unions, therefore, would further their elevated status in the nation's economy. Yet taxing credit unions would not limit their ability to compete. Canada and Australia tax their credit unions. Since taxation began in 1972, Canada's credit unions have grown at a healthy rate of 11 percent a year.

The new breed of credit unions is driven more by growth and profits than a desire to serve members. In March, Donald E. Powell, chairman of the Federal Deposit Insurance Corp., said: "The playing field has shifted in recent years. We've gone from 20 credit unions with assets of more than $1 billion 10 years ago to 83 such institutions today. In my view, if they are going to compete with banks then we should do our best to ensure that the competition is fair."

We endorse that position. And for the record, a credit union with assets of $1 billion is larger than 94 percent of the banking industry's institutions.

EDWARD L. YINGLING

Executive Vice President

American Bankers Association

Washington