WASHINGTON—America’s Credit Unions is pushing back on criticism from community bankers while simultaneously urging Congress to preserve the federal tax status of credit unions, as debate intensifies in Washington over deposit insurance and budget policy.
In a letter to the editor published by American Banker, ACU President and CEO Scott Simpson responded to a recent op-ed from a community banker that argued the proposed Main Street Depositor Protection Act would give credit unions an unfair advantage.
Simpson challenged that claim, arguing the issue raised by bankers centers less on policy substance and more on parity. If banks are concerned about fairness in deposit insurance, he wrote, they could support reforms requiring community banks to contribute to FDIC coverage in a manner similar to how credit unions fund their own deposit insurance.
Reason for Opposition
Simpson added that opposition to the legislation is not based on expanding coverage levels or its focus on business accounts, but rather on extending the same deposit insurance coverage levels to credit unions as banks. He further emphasized that the bill is intended to protect worker payrolls, enhance financial stability, and support small and midsize businesses that drive economic growth, many of which rely on credit unions.
Letter to House Leadership
At the same time, Simpson is pressing lawmakers on a separate front tied to federal budget negotiations.
In a letter to House leadership, he urged lawmakers to reject any tax-related amendments as they consider the Senate-passed budget resolution, warning that such changes would force the measure back to the Senate and potentially delay action. The resolution, as passed, contains no tax provisions.
In that letter, Simpson underscored the economic role of credit unions, writing that they act as an economic catalyst by providing safe and affordable financial services. He cited industry data indicating that in 2025 credit unions generated $352 billion in economic output, supported 1.3 million jobs, and produced $40 billion in tax revenue while lowering costs and expanding access to financial services for consumers.
‘Significant Financial Benefits’
The letter further argued that credit unions’ consumer-focused model results in significant financial benefits. According to Simpson, credit unions delivered approximately $42 billion in financial benefits in 2025—nearly 17 times the estimated $2.8 billion cost of their federal tax status as projected by the Joint Committee on Taxation for 2026.
Simpson also pointed to lower loan rates, higher savings yields, and reduced fees compared with other financial institutions, adding that credit unions continue to provide substantial savings and affordable services despite holding only a single-digit share of the financial services market.
