WASHINGTON–Threats to the credit union tax exemption in Congress have been an annual occurrence for decades, but just how much more seriously losing that exemption is being taken in 2025 can be seen in a movement-wide effort not seen since credit unions pushed the Credit Union Membership Access Act through Congress more than 25 years ago.
While current efforts aren’t as massive and wide-ranging as was the two-year effort to get that legislation passed, CUs and trade groups are rolling out everything from a new geo-fenced advertising campaign, holding multiple national webinars, sending a joint letter to Congress signed by a coalition of groups, delivering more than a half-million “Don’t Tax My Credit Union” messages to members of Congress, and, reminding those same members of Congress that credit union members represent 40% of the U.S. population.
A letter sent by a coalition of credit union groups to Capitol HIll is reported on separately here.
As the CU Daily has been regularly reporting, credit unions are especially concerned this year that Congress might revoke the tax exemption as it seeks ways to pay for expiring provisions of the 2017 tax cuts, which President Trump wants to see renewed. But Congress is under pressure to find “pay-fors” to offset the cost of the tax cuts, especially from deficit hawks.
While the CU tax exemption has been something of a third rail in Congress for decades, this year’s GOP-controlled Congress and an unpredictable Trump administration clearly have credit unions worried. And credit unions in one state have already seen one crack appear. As the CU Daily was the first to report, the state of Washington is closing a loophole in state law that allowed credit unions to buy banks without paying
DCUC Rolls Out Ad Campaign
The Defense Credit Union Council (DCUC) has launched a new geofencing advertisement campaign it said is designed to reach policymakers and legislators throughout the D.C. area. With funding from DCUC’s Defending Credit Unions National Advocacy Fund, the “campaign reaffirms the importance of preserving the federal tax status of credit unions.”
The campaign includes a video that DCUC said “spotlights the critical role credit unions have in their communities by providing essential financial services and access, especially when supporting the unique challenges faced by service members, veterans, and their families.”
The video can be viewed here.
The ad warns that eliminating or altering the long-standing tax exemption could hinder credit union’s capacity to fulfill their mission, DCUC said.
The Real ‘Risk’
“Through this campaign, we’re making sure the voices of military families are heard loud and clear,” DCUC President/CEO Anthony Hernandez said in a statement. “Taxing credit unions may seem like a policy shift on paper, but in practice, it risks cutting off a critical support system for those who serve. We’re calling on lawmakers to preserve what Congress has recognized for decades serves a critical purpose, and protect the very institutions that stand behind our nation’s defenders.”
Added Jason Stverak, DCUC’s chief advocacy officer, in a statement, “The credit union tax exemption isn’t a loophole — it’s a reflection of our not-for-profit mission to serve members, not shareholders. For defense credit unions, this means delivering trusted, affordable financial services to the men and women who wear our nation’s uniform, as well as their families and veterans. Preserving this exemption ensures that credit unions can continue to provide lower fees, better rates, and vital community programs that benefit millions of Americans.”
America’s Credit Unions Hosts Webinar
Separately, during a webinar hosted by America’s Credit Unions that drew nearly 900 attendees,
The webinar was led by ACU President and CEO Jim Nussle, along with Chief Advocacy Officer Carrie Hunt, CrossState CU Association President/CEO Patrick Conway (who is chair of the American Association of CU Leagues), and Cornerstone CU League President/CEO Caroline Willard.
The webinar focused on where Congress currently stands in the tax-writing process, and urged credit unions to participate in America’s Credit Unions’ Don’t Tax My Credit Union campaign.
As the CU Daily reported earlier here, Nussle said the trade group has a “stay out” strategy—which is currently deployed—and a “get out” strategy, should credit unions find their tax exemption under the knife in the tax bill.
What Was Said
Here is some of what was said during the webinar, as shared by America’s Credit Unions”
On Taxation
‘President Has Put This on the Agenda’
“All of our messaging strategy has been to talk about the credit union difference what we do for our members, how you use that credit union difference, including the tax incentive that we have for the benefit of our communities and the members that we serve. And that’s been our message for years, not just since the Trump tax cuts passed in 2017, but the President has put this on the agenda.”
–Jim Nussle
‘Moving the Needle’
“Being able to talk about how you’re moving the needle in your community, how you’re making a difference for your members, how you can show that in the outcomes of their financial lives is crucial to being able to defend, rationalize the fact that we have a special tax status to back up the mission that we’re trying to do.
“We’ve also backed it up with other data about what’s happening in the economy. The fact that 20,000 bank branches have closed just since the Great Recession…at the same time that credit unions have opened 600 branches—many of these in underserved communities, rural areas in urban areas, places across the country where without that bank branch, without any branch, there’s a good chance their only option is payday or something like that, particularly on the margin.”
– Jim Nussle
‘Why Pick on the Most Challenged People?’
“‘Don’t tax my credit union’ is definitely, to some extent, an advocacy threat. Don’t tax 140 million members of credit unions across the country. Why would you? Why would you extend a tax cut and at the same time pick on the most challenged people in the country—consumer members of credit unions, 140-million of them who are often on the margins—and say, those services may not be available to you. Your taxes are going to go up, because that’s how credit unions operate. We pass the profit, so to speak, on to our members.”
– Jim Nussle
‘A Defining Moment’
“I really believe this is a defining moment. This is the biggest threat that we’ve faced in a very long time. I think it’s our objective collectively, the trade associations, the infrastructure that advocates so well for credit unions across the country, to provide clear guidance to our credit unions and to provide trusted leadership as we advocate on your behalf and engage you with those efforts as we move forward. And you know every credit union story shared, every lawmaker engaged, and every advocate activated is making a difference.
“So ,thank you. Thank you to all of our credit unions…that have worked with our team and really rolled their sleeves up and done a great job. And if there’s any message I would leave all of you with today, is keep going. As Jim said, this is the time to do it…We’re stronger than we are on our own, and that’s the unique strength of the credit union system.”
–Patrick Conway
The Lesson From Down Under
“You may think this is a uniquely U.S. scenario, but I just got back from Africa last week, and we were talking to the Uganda Credit Unions, whose tax status is expiring in 2027, about the importance of preserving the difference of credit unions, because we’ve seen other international examples like in Australia, where the tax status went away, and then there was a sharp decline in the number and vitality of credit unions in that country.
“So, we have an obligation as U.S. credit unions to do an extraordinarily good job in this fight, because I don’t think I’m being dramatic when, by saying that if our domino falls, other dominoes could fall. I don’t take that lightly. I don’t think anyone on this call does.”
–Caroline Willard
NCUA & Independence
All About ‘Stability’
“What we’ve tried to say very clearly is number one, we want and support, and will continue to advocate for, an independent agency to regulate credit unions. Number one. Second is that we want a full contingency of board members to do that job. And we believe that’s not only important from a following the law standpoint. But it’s also primarily important from a stability standpoint. Credit unions, like a lot of other financial institutions, thrive on stability, thrive on predictability, understanding what’s coming, being able to manage risk, and whenever that is uncertain, it can cause challenges.
So, we are going to continue to advocate for a 3-member board. We’ve called on the President and the Administration to nominate members and to work through the nomination process.”
– Jim Nussle
