DCUC Says Bankers’ Efforts to Subject CUs to Form 990 Would do Nothing but Add Burden

WASHINGTON–A reported effort on Capitol Hill by the banking industry to get members of Congress  to sign on to a letter asking Treasury to require federal credit unions to disclose more information around their operations, including compensation, is getting strong pushback from the Defense Credit Union Council. 

In  a draft version of the letter reviewed by The CU Daily, the bankers urge Treasury Secretary Scott Bessent and Treasury to “reconsider” the regulatory exemption that permits Federal credit unions to forgo the disclosure and transparency requirements outlined in Section 6033 of the Internal Revenue Code, which mandates that most tax-exempt organizations must file an annual information return with the Internal Revenue Service (IRS), typically a Form 990, Return of Organization Exempt from Income Tax, or a variation like Form 990-EZ or Form 990-PF. 

To date, it is not believed any members of Congress have signed or that the letter has been sent.

Reminder Offered

In its letter to Bessent. DCUC reminded that federal credit unions have been exempt from this filing for more than 50 years, a “deliberate policy ruled by Congress recognizing their unique, member-owned, not-for-profit structure and lack of federal income tax liability.”

“Federal credit unions already meet some of the most rigorous transparency and reporting standards in the financial sector,” Anthony Hernandez, DCUC president/CEO, said in a statement. “Adding a redundant Form 990 requirement would only drain resources from the very communities we exist to serve, especially military families and veterans who rely on credit unions during emergencies and government shutdowns.”

Other Points Made

In its letter, DCUC also:

• Warned that the proposal is being pushed by the banking lobby, not regulators or consumer advocates, and appears “designed to burden credit unions with new compliance costs rather than improve transparency.”
• Highlighted the role credit unions played during recent federal government shutdowns, providing 0% interest relief loans, waived fees, and offering financial counseling to military families and furloughed employees. “Imposing new reporting requirements in response to these efforts would unfairly penalize institutions that consistently step up in times of crisis,” DCUC said.
• Urged Bessent to reject any attempt to eliminate or narrow the long-standing Form 990 exemption and reaffirmed its commitment to protecting consumers and maintaining a balanced, equitable regulatory environment.