Protecting Credit Union Tax Exemption Status

DCUC engaged Congress on the credit union tax exemption status by sending a letter and questions to the Senate Committee on Finance ahead of today's hearing, “The 2025 Tax Policy Debate and Tax Avoidance Strategies.”

The hearing included testimony from the Tax Foundation referencing a footnote from the report "Reining in America’s $3.3 Trillion Tax-Exempt Economy (Tax Foundation)."

Notable statements from the June 2024 report include:

“While there still may be a role in today’s economy for insurance-providing fraternal organizations, credit unions, and collegiate sports leagues, there is no longer a justification to exempt them from taxation.”

“Lastly, federal credit unions generated $7 billion in net income in 2019 and would have been liable for $2 billion in taxes had they been taxed at 21 percent.”

DCUC submitted the following question for the record of the witness:
 
“You seem to have studied the question of credit union taxation from a wide variety of angles and perspectives. One thing I’m not hearing is how this would affect consumers not only those who are credit union members but also others who might be impacted by rates and charges going higher as a result of ending the credit union tax exemption. What kind of data do you have on this?”

Many, if not all, exemptions are likely to undergo thorough review next year when tax reform is addressed. This marks the beginning of a more extended fight for preserving our industry's tax exemption status. 
 
DCUC will continue to challenge the testimony of the witness and lead the industry's defense on this issue.