WASHINGTON–Like the current Vatican-watchers who are looking for signs of white smoke, credit unions remain focused this week on Congress and in particular on the House Ways & Means Committee for any sign of whether elimination of the credit union tax exemption is part of the budget plan.

“We’re kind of rounding the last corner as we’re going through the budget reconciliation process and this week will kind of be the kickoff of things actually happening,” said Jason Stverak, chief advocacy officer with the Defense Credit Union Council. “It was hoped that Ways and Means would start this week on that process, but it appears that they will wait until next week to officially begin the tax-writing part of the of the reconciliation process.”

During separate calls with the media, both DCUC and America’s Credit Unions said they expect some leaks to come out of the committee as “pen goes to paper,” as Stverak described it, noting Speaker of the House Mike Johnson (R-LA) has said he wants the budget plan to be completed within 10 days. 

‘Solid Wall’

“We’re working with everyone to ensure that there is a solid wall of opposition against any changes to the credit union exemption,” Stverak said. “I do want to stress how the next two weeks are incredibly important in terms of the tax status battle on Capitol Hill, and we encourage and have been encouraging all of our member credit unions and every credit union to make sure that they are reaching out contacting their members of Congress.

“Just last week we were told that during the weekly GOP chairs meeting that (a) chairman did stand up and say, ‘Hey, you know the credit union tax that is still on the table’,” Stverak added.

America’s Credit Unions Maintains Message

Similarly, Jim Nussle, president and CEO of America’s Credit Unions, said the trade group will keep up the pressure this week, and said advertising ACU has been backing in Washington since January has gotten 73-million impressions, while 550,000 direct messages have been sent to Congress as part of the “Don’t Tax My Credit Union Campaign.”

Nussle, a former member of Congress, said America’s Credit Unions has heard from some congressional offices about the amount of mail/contacts they have received on the issue of the CU tax exemption, and they have asked the trade group to “please, please stop, which is a really good sign.

“I can speak from experience that when your staff is saying stop it means they’ve noticed and the member has noticed and that’s a good thing,” Nussle said.

Nussle added that while he and America’s Credit Unions have gotten some “intel” from Capitol Hill, there has been no indication of which way the Ways & Means Committee members might be leaning when it comes to the CU tax exemption. 

Asked which way he might be leaning himself, Nussle said he is “cautiously optimistic” by nature and about the Democratic process, and while he believes the data credit unions have provided to Congress as well as the stories that have been shared are powerful, he isn’t prepared to offer a forecast for which way Congress will go on the tax exemption.

Letters Sent To Hill

The Defense Council has sent a number of letters to Capitol Hill, including a new letter to House Ways and Means Committee Chairman Jason Smith and Ranking Member Richard Neal that urges lawmakers to preserve the federal tax-exempt status of credit unions.

“The credit union tax exemption is not a special favor,” wrote Stverak. “It reflects our not-for- profit, member-owned structure and mission to serve those often overlooked by for-profit banks. Taxing credit unions would effectively raise costs for millions of working families while weakening financial access for military communities.”

DCUC said the tax exemption allows credit unions to offer lower fees, competitive rates, and access to essential financial services on military installations—often in remote or underserved areas where traditional banks are absent; strengthening financial readiness and national security.

Additional Notes

The trade group further stated:

• Consumer and Economic Impact: Credit unions return $37 billion annually to members through better rates and lower fees. “A recent economic study estimated that eliminating their tax exemption would shrink U.S. GDP by nearly $266 billion over the next decade and result in 822,000 lost jobs.”
• Misconception of “Tax Loss”: The estimated $2.9 billion annual cost of the tax exemption yields over $297 billion in economic output—a return of more than $100 for every $1 of forgone federal revenue, DCUC stated.
• Risks to Communities: Removing the tax exemption would force smaller credit unions to close or consolidate, leaving military bases and underserved neighborhoods vulnerable to predatory lending and financial exclusion, the letter states. 

NDAA Discussed at Meetings

Stverak said the Defense Council has also set up meeting on Capitol Hill to discuss the National Defense Authorization Act (DCUC) as Congress prepares to fund that enormous bill.