WASHINGTON–America’s Credit Unions and the Defense Credit Union Council (DCUC) are responding to what they are calling “disinformation” from the banking industry that is being spread in Washington ahead of debate around funding the federal government and by an opinion piece that appeared in a national publication.
America’s Credit Unions said a “significant Big Bank–backed influencer campaign” is taking place that is aimed at undermining the “financially inclusive role of credit unions”
In addition, America’s CUs said it is also responding to an op-ed authored by Ryan Ellis of the Center for a Free Economy that was published by American Banker under the headline, “Federal Credit Unions are Cashing in On a Double Tax Exemption.” In that piece, Ellis argues, “Credit unions are grifting taxpayers twofold because they are exempt from most federal, state, and local taxes, and are subsidized by an arcane entity housed within the U.S. Treasury Department: the Community Development Financial Institution, or CDFI, Fund…”
‘Tired Clams’
“These attempts by banks to call for a so-called ‘level playing field’ would do anything but that. These tired claims are deeply flawed, relying on deliberate misdirection and chronic misinformation,” America’s Credit Unions President and CEO Jim Nussle said in a statement. “As not-for-profit financial cooperatives, credit unions are uniquely positioned to leverage the Community Development Financial Institutions (CDFI) Fund to benefit communities nationwide. Congress deliberately included credit unions when creating the CDFI Fund, and the 2000 implementing regulation explicitly affirmed that insured credit unions can be certified as CDFIs and receive funding. Any claims to the contrary ignore both the law and the facts.
“And the facts speak for themselves: for every dollar of CDFI funding received, credit unions deliver an average of $12 in measurable community impact,” Nussle’s statement continued. “That return reflects credit unions’ mission to put people first. It’s exactly why Congress should continue to support credit unions’ work in strengthening underserved communities—whether in rural areas or urban centers—and serving the small business owners and 144 million hardworking people who count on credit unions today and into the future.”
‘Key Facts’ Shared
As it has in similar circumstances, America’s Credit Unions issued a list of “key facts” it said are relevant, including:
Fact Check: “Congress explicitly included credit unions in the CDFI Fund’s creation and 2000 implementing regulation.”
Impact: “For every $1 of CDFI funding, credit unions deliver $12 in measurable community impact.”
Mission: “Credit unions are not-for-profit financial cooperatives focused on members, not shareholders.”
Reach: “Credit unions serve 144 million Americans across rural, urban, and underserved communities.”
Small Business Support: “Credit unions help small businesses grow—the economic engine of Main Streets nationwide.”
DCUC Responds
In its response to the op-ed in American Banker, Jason Stverak, chief advocacy officer with the DCUC said, “This is a fundamental misunderstanding of both the law and the purpose of the CDFI program. Credit unions are independent, member-owned cooperatives—not government agencies. They have long been recognized by Congress and Treasury as eligible CDFIs precisely because they are best positioned to serve low-income and underserved populations.”
In its statement, DCUC sought to remind that banks benefit from “enormous tax breaks of their own, far exceeding those enjoyed by credit unions,” including:
- Over 2,000 banks—more than one-third of all U.S. banks—organize as Subchapter S corporations to avoid corporate income tax at the entity level, saving an estimated $1.8 billion in 2022 alone.
- The 2017 corporate tax cut reduced banks’ tax rates from 35% to 21%, “delivering a $28.8 billion annual windfall.”
- Altogether, “large for-profit banks reap well over $20 billion per year in tax breaks, compared to the roughly $3 billion annual tax expenditure for all credit unions combined.”
Meanwhile, DCUC added, “credit unions hold just one-tenth the assets of the banking sector—about $2 trillion vs. $24 trillion. Unlike profit-driven banks, which distribute earnings to wealthy shareholders, credit unions return their earnings to members through better rates, lower fees, and essential community services.”
