Money and the U.S. Capitol
More than 80 credit union associations and system partners sent two coordinated letters to Senate leadership this week, urging lawmakers to protect the federal tax exemption for credit unions as budget reconciliation negotiations continue in Congress.
The letters, addressed to Senate Majority Leader John Thune and Minority Leader Chuck Schumer, emphasized the vital role credit unions play in serving 142 million members and the economic risks of eliminating their tax-exempt status.
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“The credit union tax exemption is not a special interest favor — it is a reflection of our unique, not-for-profit structure and member-focused mission,” the joint trades letter stated. “Eliminating or altering this exemption would not punish institutions — it would punish working families, veterans, and small businesses.”
The letters argued that credit unions reinvest earnings into their communities, providing lower loan rates, higher savings yields and fewer fees. In 2024 alone, this translated into $35 billion in total member benefits. “The average credit union member saves $220 per year,” the letter noted.
America’s Credit Unions and the American Association of Credit Union Leagues highlighted credit unions’ modest market share, which is still in the single digits, and compared the $2.6 billion tax exemption to the permanent corporate tax cuts received by banks under the 2017 Tax Cuts and Jobs Act, which the FDIC estimated gave banks an annual $28.8 billion windfall.
They also pushed back on criticisms from banking trade groups. “Many credit union opponents want to limit competition from credit unions and increase bank profits,” the letter said. “The real competition for smaller banks actually comes from bigger banks.”
Calling the credit union tax exemption “one of the best returns on the tax expenditure dollar for the federal government,” the coalition asked the Senate to publicly reaffirm its commitment to preserving the exemption and ensure no provisions in reconciliation erode it.
“Credit unions exist to serve, not to profit,” the letter concluded. “Please stand with us in preserving the credit union tax exemption and the people who depend on it.”
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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.
