The credit union tax status is beneficial to more than members, CUNA states in new white paper. (Source: Shutterstock)
The benefits that credit unions provide their members far outweigh the cost of their tax exemption, CUNA argues, in an updated version of a white paper defending the credit union tax status.
"Credit unions provide substantial benefits to their members and indirect benefits to nonmembers," CUNA said. "In 2018 alone, these benefits – which accrued to both directly to members and indirectly to bank customers – totaled more than $16 billion."
Recommended For You
"The dollar amount of these benefits greatly exceeds the loss in federal revenue—estimated by the Joint Committee on Taxation to be $1.8 billion in 2018—that would result from imposing new federal income taxes on credit unions," CUNA said.
The white paper is largely unchanged from the version released last year—the only large difference is that the statistics CUNA used have been updated.
In the paper, CUNA contends that many larger credit unions would likely convert to banks if the tax exemption were eliminated, and that many smaller credit unions would merge or go out of business.
Even though Congress is unlikely to tackle a comprehensive tax bill during the 116th Congress, bankers and credit union officials are continuing their perpetual battle over the credit union tax status.
And a more strident opponent of the tax status has emerged; it's a website—explorecreditunions.com. It is unclear who operates the website. The domain name is registered anonymously, and the backer of the site is not identified.
The website singles out large credit unions for its most pointed criticism.
"Credit unions were granted federal income tax exemption for a reason, but over the years they have continuously abused the system with no oversight," the website states. "Congress never intended for tax savings to be squandered on marketing, executive pay, and sponsorships."
Not to be outdone, the CUNA white paper singles out Subchapter S banking institutions, which it says "significantly reduce" U.S. Treasury revenue.
CUNA also updated several arguments made in its 2018 paper:
- While credit unions do not pay federal income tax, they pay nearly $20 billion a year in federal, state and local taxes.
- It took 110 years for credit unions to grow to a total of $1.5 trillion in assets. U.S. banking institutions grew by $1.9 trillion during the past three years.
- Overall credit union assets are equal to 7% of total depository assets.
- Bank customers saved $4.6 billion in 2018 as a result of more favorable bank pricing as a result of competition from credit unions.
- Overall, 61% of credit union members who rely primarily on their credit unions for financial services have incomes between $25,000 and $100,000. That compares with 54% of bank customers.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
