As Congress prepares for a sweeping overhaul of the 2017 tax law, a coalition of over a dozen credit union organizations representing more than 4,500 institutions and 140 million Americans issued an urgent plea to preserve credit unions’ longstanding federal tax-exempt status.
In a letter to congressional leadership Wednesday, the group emphasized that the exemption is not a loophole, but a recognition of credit unions’ unique not-for-profit, member-owned structure. “(The) tax exemption is not a special favor – it is a recognition of credit unions’ unique ‘people over profit’ mission and the tremendous value they provide to everyday Americans,” the coalition wrote.
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The renewed advocacy came as lobbying by big bank trade associations intensifies. Some lawmakers have signaled openness to revisiting the exemption, prompting a nationwide campaign called “Don’t Tax My Credit Union.” The letter warned that revoking the tax status would force credit unions to raise fees and loan rates, limit service in underserved communities and accelerate market consolidation, all to the detriment of working families.
Credit unions currently deliver more than $36 billion in economic benefits annually through better rates and lower fees. Meanwhile, banks benefit from significant tax breaks, including the 2017 corporate tax cut and the Subchapter S election, which saved banks $1.8 billion in 2022 alone. “It is galling that some in the banking industry, after receiving huge tax cuts and even taxpayer-funded bailouts in the past, are now lobbying to raise taxes on credit unions,” the letter noted.
“Taxing credit unions is effectively a tax on their members,” the letter stated. “It would strip essential financial tools from rural areas, military communities, and underserved neighborhoods — areas where big banks often fail to serve.”
The coalition called on lawmakers to reject any proposal to alter the exemption, reaffirming that “preserving the credit union tax exemption is about protecting financial access for millions of everyday Americans.”
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
