Advocacy in Action: Standing Strong After the Shutdown - Defending Our Credit Union Priorities

When the federal government shutdown hit this fall, credit unions across the country sprang into action. We offered furloughed government employees and military families emergency no-interest loans, skip-a-payment options, and fee waivers to help make ends meet.

For example, one California defense credit union provided 0% APR relief loans up to $10,000 and allowed affected members early access to savings with no penalties. In Washington, D.C., while a local bank sent customers no message of support, a nearby credit union immediately reached out with relief options and removed barriers to emergency funds. This stark contrast illustrates “the credit union difference” in action. We acted like the financial first responders of our communities, while much of the banking sector remained comparatively quiet. Our not-for-profit, member-owned structure – focused solely on serving members, not stockholders – is the engine that enables us to respond quickly and compassionately when our communities face hardship. Credit unions’ tax-exempt, people-first mission isn’t a perk; it’s the reason we can put our members and communities first, especially when crisis strikes.

Now that the government has reopened, we must channel that same all-hands commitment into an aggressive, forward-looking agenda. We have critical battles ahead – and we intend to win them. From must-pass defense legislation to beating back renewed bank attacks, DCUC is seizing this moment to protect our mission. Below I outline our advocacy priorities following the shutdown and how, together, we will defend the credit union model that proved its worth yet again in this crisis.

A Forward Agenda in NDAA 2025: Protecting CDFI Funding and the CLF
Congress has turned its attention to the Fiscal Year 2025 National Defense Authorization Act (NDAA), and we are all-in to secure key credit union priorities in the final bill. Chief among these are strengthening the Community Development Financial Institutions (CDFI) Fund and the National Credit Union Administration’s Central Liquidity Facility (CLF). Thanks to bipartisan support in the Senate, provisions to bolster both programs are on the table – and we are fighting to ensure they cross the finish line.

Supporting CDFI Credit Unions: Over 500 credit unions are certified CDFIs, serving nearly 20 million Americans in distressed communities. In fact, credit unions are often the only financial lifeline in underserved areas – including rural towns, inner-city neighborhoods, and military bases. By extending affordable credit, financial education, and critical services, CDFI credit unions help families, small businesses, and servicemembers who are too often overlooked by larger banks. That’s why DCUC strongly backs the bipartisan NDAA amendment led by Senators Mark Warner (D-VA), Steve Daines (R-MT), Mike Rounds (R-SD), and Tina Smith (D-MN) to expand and strengthen the CDFI Fund. This measure would extend the CDFI Bond Guarantee Program for four years (while lowering the minimum bond size to expand access) and permanently authorize the Native American CDFI Assistance program. It even requires the Treasury Secretary to provide annual testimony on CDFI Fund operations, increasing transparency and accountability. In short, it invests in the future of mission-driven lenders. As DCUC President/CEO Anthony Hernandez emphasized, “Strengthening the CDFI Fund ensures that [credit unions] can continue to serve families, small businesses, and servicemembers” in financially underserved communities. These reforms will help mission-focused credit unions expand access to capital, strengthen underserved communities, and support financial readiness for military families and veterans. We applaud the Senate for including these CDFI measures, and we insist the House retain them as NDAA negotiations proceed.

Reinforcing the Central Liquidity Facility: Another hard-won Senate provision would restore and permanently improve the CLF, the emergency liquidity backstop for credit unions. During the pandemic, temporary enhancements to the CLF proved invaluable – they expanded smaller credit unions’ access to federal liquidity and helped those serving military and low-income communities stay solvent through crisis. Unfortunately, when those provisions expired in 2022, thousands of credit unions lost access to this vital safety net. The Senate’s bipartisan CLF amendment, championed by Senators Alex Padilla (D-CA) and Kevin Cramer (R-ND), fixes that. It would restore the enhanced borrowing authorities and membership flexibility, ensuring credit unions can continue supporting members during emergencies at no cost to taxpayers. In practical terms, if enacted this will allow credit unions easier access to critical emergency liquidity through the NCUA’s Central Liquidity Facility whenever challenging times hit. Permanently strengthening the CLF does exactly that. It is a common-sense safeguard that empowers us to continue the “people helping people” mission even under economic duress.

DCUC has been leading the charge to get these CLF and CDFI provisions included, and we won’t let up until they are law. The good news: the Senate overwhelmingly adopted both measures with bipartisan support. Now, we call on the House to do its part and preserve these provisions in the final NDAA. This isn’t just about credit unions – it’s about the financial security of our troops and communities. After all, financial readiness is mission readiness. By maintaining the CDFI Fund improvements and CLF enhancements, Congress will strengthen our nation’s financial system and the defense community at the same time. In the wake of the shutdown, there is no better way for lawmakers to support those who serve than by equipping their financial first responders with the tools to succeed. We remain optimistic and relentless in pushing this NDAA agenda: our servicemembers, veterans, and their families deserve nothing less than a robust credit union network standing ready to meet their needs.

Pushing Back Against Bank Attacks on Our Tax Status (Form 990 Fight)
Even as we advance our priorities, we face a renewed assault from the banking lobby. No sooner had credit unions upstaged banks by stepping up during the shutdown, than some bank trade associations began clamoring for ways to hamstring our movement. Their latest ploy? Demanding that federal credit unions be forced to file IRS Form 990, an annual reporting form for tax-exempt nonprofits. Don’t be fooled – this is a cynical retaliation disguised as a call for “transparency.” In reality, it’s a solution in search of a problem aimed at bogging credit unions down in redundant red tape and undermining our tax-exempt status.

Let’s call this attack what it is: a power move by big banks who have long resented credit unions’ tax treatment and the loyalty we enjoy in our communities. Unable to match our grassroots goodwill, they hope to saddle credit unions with new regulatory burdens to slow us down. The timing says it all – just as credit unions were earning accolades for aiding furloughed workers, bank lobbyists started pushing this Form 990 mandate out of sheer frustration. They argue it’s about transparency, but that claim doesn’t hold water. Federal credit unions already undergo far more rigorous financial reporting than any Form 990 would provide. Every quarter, we file exhaustive Call Reports with NCUA – thousands of data points on our loans, investments, earnings, executive compensation and more – much of which is publicly available. In fact, the IRS explicitly exempted federal credit unions from Form 990 in 1988 precisely because our regulator was already collecting all the necessary information. There is no “transparency gap” here – our books are an open pamphlet compared to the opaque practices in banking. For decades, Congress and regulators have recognized that piling an IRS form on top of NCUA oversight is redundant and legally unnecessary.

The banking lobby’s demand for credit union 990 filings drips with hypocrisy. Banks themselves would never submit to the disclosure standards they want to impose on us. Consider this: roughly one-third of all U.S. banks – over 2,000 institutions – have chosen Subchapter S tax status, meaning they pay no corporate income tax at the entity level. Not a single one of those tax-advantaged banks files a Form 990 or discloses its CEO’s compensation to the public. None. The very same banks that quietly pocket tax breaks and keep executive pay under wraps are lecturing credit unions about transparency. It’s a textbook double standard. Studies have shown that while credit unions reinvest our tax exemption into better rates and lower fees for members, Subchapter S banks use their tax break largely to pad shareholders’ returns. There is zero requirement for those banks to report how their tax windfall is used or to benefit their communities – yet they brazenly demand that even the smallest volunteer-run credit union publish every detail of its finances. We won’t stand for such audacity.
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Let me put some facts on the table, because our record of public benefit speaks for itself and it dwarfs any supposed “competitive advantage” our tax status confers. Banks already enjoy massive tax benefits of their own. In fact:

• Over one-third of U.S. banks – more than 2,000 institutions – organize as Subchapter S corporations specifically to avoid corporate income tax at the entity level, saving an estimated $1.8 billion in taxes in 2022 alone.
• The 2017 Tax Cuts and Jobs Act slashed bank tax rates from 35% to 21%, delivering a $28.8 billion annual windfall to the banking industry.
• All told, large for-profit banks reap well over $20 billion per year in tax breaks, far more than the roughly $3 billion annual tax expenditure for all credit unions combined.

These are the same banks that want to lecture us about tax fairness! The truth is that credit unions, as not-for-profit cooperatives, earn our tax exemption every day by returning value to our members and communities. We hold barely one-tenth of the banking sector’s assets (about $2 trillion vs. $24 trillion), but unlike profit-driven banks – which exist to enrich shareholders – credit unions return earnings to their owners: ordinary members. That means better savings rates, lower loan rates, fewer fees, and community programs that directly benefit working families. The value proposition of our tax status is crystal clear. It’s the reason a recent op-ed’s smear calling credit unions “tax grifters” fell flat – it betrayed a fundamental misunderstanding of the law and the purpose of the credit union tax exemption. Credit unions are independent, member-owned cooperatives – not government entities – and Congress has upheld our tax treatment precisely because we channel those benefits to the people and areas that need them most. We are proud of that role, and we’ll defend it vigorously.

Requiring federal credit unions to file Form 990 would accomplish nothing except to drain resources away from member service. It is redundant, burdensome, and counterproductive. Many credit unions (including numerous defense credit unions) are relatively small, with lean staffs where everyone wears multiple hats. They don’t have an army of compliance officers on standby like the mega-banks do. For these community institutions, an added complex IRS filing isn’t “just paperwork” – it’s hours and dollars that would otherwise go to issuing small-business loans, teaching financial education classes, or opening a branch in an underserved neighborhood. In short, this banker-proposed mandate would hurt Main Street, not help it. It’s telling that even as banks lobby to saddle us with more red tape, they’ve also been angling to strip away rules on themselves (for example, fighting to kill new interchange fee constraints or transparency around their own tax dodges). We won’t let their double-standard go unchallenged. DCUC is aggressively pushing back – on Capitol Hill, in the media, and in coalition with our credit union partners – to ensure policymakers see this Form 990 gambit for what it is: a retaliatory attack that deserves no serious consideration.

Our message to Congress is simple: credit unions have proved yet again that our tax status is in the public interest. Punishing the very cooperatives that bailed out military families and federal workers during the shutdown would be as senseless as it sounds. Instead of entertaining bank lobbyists’ tired wish list, lawmakers should be celebrating and reinforcing the crucial role credit unions play in our economy. Attempts to undermine our tax exemption – whether by formal repeal or backdoor “gotchas” like mandatory Form 990 – must be swiftly rejected.

Defending the Credit Union Model for Service Members and Communities
At its core, this fight is about defending the credit union model and the undeniable value it provides to Americans – especially our service members, veterans, and their families. We know our mission, and we know our impact. For over 60 years, defense credit unions have stood shoulder-to-shoulder with those who serve our nation, ensuring military members have access to fair, affordable financial services tailored to the unique challenges of military life. From offering lower-interest emergency loans during pay delays, to providing financial education before deployments, to simply being there on base as a trusted partner – credit unions advance the financial readiness of our armed forces every day. The old Pentagon adage rings true: “Financial readiness is mission readiness.” A soldier, Marine, airman or sailor distracted by money troubles is not fully focused on the mission. By contrast, a service member backed by a strong credit union – one that understands PCS moves, deployment impacts, and military family needs – is more financially secure and mission-effective. In this way, credit unions contribute quietly but powerfully to our national defense.

The same is true in communities across America. Our member-owned, people-first approach makes us uniquely responsive to community needs. We don’t answer to Wall Street; we answer to our neighbors. We don’t measure success by quarterly profit, but by the financial well-being of a working mom getting her first mortgage or a young serviceman consolidating his debt. That ethos pays real dividends to the public. Last year alone, the credit union difference delivered an estimated $10+ billion in direct financial benefits to U.S. consumers through better rates and lower fees. That’s money that stayed in our members’ pockets – military families saving on auto loans, teachers earning higher interest on savings, small businesses getting affordable credit to expand. Moreover, credit unions pour earnings back into free financial counseling, first-time homebuyer programs, and small-dollar emergency loans that big banks often won’t bother with. These programs are lifelines that help everyday people build financial stability.

What happens if banks succeed in eroding the credit union model? The consequences would be severe. Fewer credit unions would mean fewer choices and higher costs for consumers, who would lose billions in benefits each year. Many smaller credit unions – particularly those in rural areas or on military bases – could be forced to merge or close, creating “financial deserts” where communities are left without any locally focused financial institution. We cannot let that happen. The stakes are simply too high, for our members and for the nation.

Thankfully, we have strong bipartisan allies who understand the value we deliver. The same NDAA amendments we’re fighting for – on the CDFI Fund and CLF – show that lawmakers from both parties recognize how vital credit unions are to financial inclusion and economic resilience. They know that when disaster strikes or when underserved communities need investment, it’s not JPMorgan or Bank of America opening a branch in that small town or on that remote base – it’s the local credit union, often the only game in town. Even our critics inadvertently acknowledge our impact: they argue credit unions have grown in market share and in community influence. We have grown, precisely because we’re meeting needs that others neglect. And we will continue to grow, responsibly and steadfastly, as long as those needs exist.

So, to my fellow DCUC members and credit union colleagues: now is the time to stand tall. We have weathered the storm of the shutdown by living out our philosophy of service. We have proven once again why the credit union model is indispensable. With that momentum, we approach the coming legislative battles with optimism and determination. Our agenda is ambitious – securing NDAA wins, fending off banker attacks, and always defending our members’ financial well-being – but I am confident we will prevail. DCUC, in concert with our national and state partners, is making sure our voice is heard loud and clear in Washington.

We need each of you in this fight. Engage your teams and members in advocacy. Share your stories of how your credit union has made a difference for a military family or community neighbor. Those stories are our ammunition against false narratives. Reach out to your representatives and remind them what’s at stake. Encourage your members to do the same. When credit unions unite and speak with one voice, we are a force to be reckoned with – and we will not be ignored.

In closing, let’s remember why we’re here. We are here to ensure that those who defend our nation, and the communities they call home, have financial partners they can trust. We are here to uphold a cooperative legacy that channels benefits back to Main Street, not Wall Street. We are here to fight for the ability to serve, unabated by misguided laws or self-interested attacks. The government shutdown tested our mettle, and we delivered. Now, we carry that spirit forward. With Congress back to work, it’s game on for credit union advocacy.

I am optimistic about what we can achieve, because I’ve seen what you – the credit union champions – are capable of. Together, let’s secure the legislative wins our members deserve, beat back the bank lobby’s attacks, and strengthen the credit union movement for generations to come. Our cause is just, our unity is strong, and our momentum is undeniable. We proved it in the crisis, and we will prove it again in the halls of Congress. Let’s get to work – onward and upward for our servicemembers, our communities, and our credit union family.

Thank you for all you do, and let’s continue to stand strong, together, in defense of our mission and our members.

United, we’ll ensure 2025 is a banner year for credit union advocacy and the communities we serve.

Together, we defend the financial front lines – and we refuse to yield.