DCUC Calls on Congress: Safeguard Credit Union Tax Status in Reconciliation 2.0

WASHINGTON, DC – The Defense Credit Union Council (DCUC) has sent a letter to both the House and Senate Budget Committees’ leadership regarding ongoing discussions around a potential “Reconciliation 2.0” package, urging lawmakers to exclude any consideration of changes to the longstanding federal tax status of credit unions. ​

As Congress evaluates potential offsets and policy changes, DCUC advised how credit unions continue to serve as leading stewards of Americans’ financial readiness, especially for servicemembers, veterans, federal employees, and their families. 
 
DCUC’s Chief Advocacy Officer Jason Stverak outlined several concerns and provided considerations ahead of potential budget discussions among the committee members: 
 
Critical financial support during uncertainty: During recent government shutdowns, credit unions provide: 

• 0% emergency loans 
  

• Paycheck advances 
  

• Fee waivers and loan deferrals 
  

• On-base financial assistance for servicemembers and families 
  

 
Stverak noted that direct impact on military communities could be expected in terms of increased costs and reduced access to financial services if there were a change to the federal credit union tax status. 
 
“This tax status reflects the not-for-profit, member-owned structure of credit unions and allows these institutions to continue returning value directly to their members. The ‘loop-hole’ claim is a tired antic that mischaracterizes the long-standing purpose and recognition of the cooperative mission credit unions carry out across communities nationwide,” says Stverak. “Using credit union tax status as a late-stage revenue offset could have unintended economic and community-level consequences.” 
 
DCUC’s letter stressed that weakening credit unions would reduce their ability to provide critical, real-time financial support, especially during periods of economic disruption: 
 
“As of the end of the fourth quarter of 2025, federally insured credit unions served approximately 144.7 million members and held approximately $2.43 trillion in assets, according to NCUA’s published system performance data. Within that broader system, DCUC has documented that defense-oriented credit unions collectively serve over 40 million member-owners and manage over $525 billion in assets, including overseas and on-base footprints that support military financial readiness. We recognize that reconciliation discussions are frequently shaped by “pay-for” lists and static budget tables. Treasury’s FY2026 tax expenditure estimates list the exemption of credit union income at roughly $2.48B in FY2025 and about $32.17B across FY2025–FY2034, numbers that can make credit unions appear to be a convenient offset. But Treasury itself cautions that tax expenditure estimates do not necessarily represent the receipts that would follow from repeal due to behavioral responses and interaction effects.” 
 
“Credit unions are not just financial institutions—they are mission-driven partners in supporting the financial security of millions of Americans, including those who serve our country,” said Anthony Hernandez, DCUC President/CEO, Retired U.S. Air Force Colonel. “Any effort to alter their tax status risks weakening a system that consistently steps up in times of crisis. Congress should be reinforcing these institutions, not considering policies that could limit their ability to serve members when it matters most.” 
 
DCUC welcomed the opportunity to brief congressional offices further and provide additional data on the impact to constituents. ​