By Jason Stverak
As Congress finalized H.R. 1 – the major tax and budget package – without any mention of credit unions, our industry breathed a sigh of relief. This legislation preserves the tax-exempt status that underpins our mission, and that is no small feat.
We emerged victorious in this round, but let me be clear: that was just one battle, and the war is far from over. Just days before the final bill came together, we were bracing for the worst amid rumors that our tax exemption could end up on the chopping block. Those fears were thankfully put to rest – but the fact that our status was even under threat should serve as a wake-up call. Now is not the time for complacency; the credit union industry must remain united, proactive, and strategic in defending our cause.
The Troubling Takeaway
One troubling takeaway from the H.R. 1 fight is that too many lawmakers were willing to even consider stripping credit unions of our tax status. This battle exposed an uncomfortable truth: many members of Congress have begun to question the value we provide. For decades, credit unions enjoyed broad bipartisan support – our tax exemption was reaffirmed as recently as 1998 in the bipartisan Credit Union Membership Access Act. Lawmakers historically recognized that our not-for-profit, member-owned model warrants different tax treatment because we pour earnings back into our communities.
As I often remind people, our tax exemption is not a loophole or a gift; it’s a recognition of our unique mission and structure. So why are some in Congress doubting us now?
The answer lies in the relentless campaign by the banking industry to erode our image and distort our story. Perhaps we in the credit union movement assumed our value was self-evident and would always be appreciated – meanwhile, the bank lobby was busy chipping away at our support.
Frankly, we lost ground in the narrative battle. We saw legislators parroting bank talking points and expressing skepticism that would have been unthinkable a few years ago. This is a clear sign that we need to redouble our efforts to tell the credit union story. Our mission hasn’t changed – we exist to serve our members and communities, not to maximize profits – but obviously we must do a better job educating policymakers about that mission every single day.
Banks Will Never Stop Attacking
Let’s not mince words: the banks will not stop trying to get rid of our tax status.They never have, and after this fight, they likely feel emboldened. Banks have long painted our tax exemption as an “unfair advantage” – a talking point that is as misleading as it is hypocritical. Consider this: large banks receive over $20 billion per year in tax breaks and exploit the tax code to avoid paying corporate income tax.
Yet those same institutions spend millions on lobbyists to complain about ourmuch smaller tax exemption. It’s galling, and they do it because they know undermining our status gives them an edge in the marketplace.
In recent months, bank lobbyists bombarded Congress with misinformation about credit unions. We even heard the tired argument that “if credit unions have money to buy stadium naming rights, surely they can afford to pay federal income tax.” This simplistic claim completely misses the mark. Those high-profile community sponsorships are not frivolous spending – they’re strategic investments in outreach and financial education, often funded from marketing budgets approved by our member-elected boards.
More importantly, unlike banks, credit unions return all earnings to our members through better rates, lower fees, and dividends – not into shareholders’ pockets. In other words, any “profits” we make go right back to the people we serve, which is exactly why Congress granted us tax-exempt status in the first place.
Despite these facts, the banks’ campaign clearly made some headway – enough that a number of legislators started echoing their lines. Make no mistake, the bank lobby’s goal is to weaken and eliminate us as competitors, and they will seize any opportunity to try again. They see taxing credit unions as a win-win for banks: it would hamstring our ability to serve members and effectively amount to a government-sponsored boost to bank market share.
In truth, any effort to change the credit union tax status would be Congress doubling down for big banks while increasing taxes on 142 million Americans who are credit union members. Those 142 million Americans are the reason we fight, and we cannot let the banks or anyone else forget that.
Defense Credit Unions: Serving Those Who Serve
If we need a vivid example of the credit union difference, we need look no further than America’s defense credit unions. For over 80 years, defense credit unions have operated on military installations worldwide, providing affordable financial services and trusted guidance to servicemembers, veterans, and their families. These member-owned, not-for-profit institutions fill gaps where for-profit banks often will not – from maintaining branches on base in remote locations to creating tailored programs for deployed troops.
We proudly carry out the mission to serve those who serve our country.
Now imagine the impact if our tax exemption were eliminated. Taxing defense credit unions would be a direct hit on the financial readiness of our nation’s military. Why? Because the money we’d have to pay in federal taxes is money not going toward better rates on auto loans for junior enlisted families, or toward zero-interest emergency loans for military members, or toward the free financial counseling programs many credit unions offer on base.
I’ve warned lawmakers that removing our tax exemption would raise costs for military families and even force some credit union branches on bases to shut down – leaving servicemembers with fewer options and pushing them toward predatory lenders.
By maintaining the credit union tax status, Congress allows us to keep reinvesting earnings into our members – delivering lower fees, improved rates, and community support programs instead of sending those dollars to Washington.
In short, keeping credit unions tax-exempt directly benefits the very people our elected officials have sworn to protect: their constituents, including millions of servicemembers. It’s a policy that yields immense public value at minimal cost, and we need to make sure every lawmaker understands that.
Press Releases Won’t Ensure Victory
So where do we go from here? The fight for our tax status is far from over, and we must stay fully engaged. The truth is, we cannot win this long war by playing defense only when a threat looms. I often say that issuing press releases alone will not ensure victory. Yes, we won an important battle in H.R. 1, but we cannot just declare victory and go home.
It’s going to take constant vigilance and daily advocacy to protect our future. We need to double down on educating every member of Congress – continually and proactively – about the value of credit unions and the communities we serve. We must show our worth not just in crises, but every single day.
What does that mean in practice?
It means we need boots on the ground walking the halls of Congress everyday sharing the credit union message and pushing back against the mistruths and lies from the banks.
It means credit union advocates – from CEOs to front-line staff to loyal members – must keep telling our story and demonstrating our impact. It means inviting lawmakers to visit our credit unions, see our community programs, and meet the people whose lives we’ve improved.
It means arming our champions in Congress with facts and examples, so when bank lobbyists come knocking, those representatives can say, “No – I’ve seen what credit unions do in my district, and I know why their tax status matters.” It means mobilizing the grassroots: encouraging the 142 million Americans who belong to credit unions to speak up and remind their elected officials whom this tax exemption truly benefits.
The Good News
The good news is, we know how to do this. The H.R. 1 battle, if anything, proved that when the credit union movement stands together, we can move mountains. Over the past year, DCUC and our industry partners anticipated the tax threat early and led a strategic, united response – sending over 30 letters and joining forces in broad coalitions to counter misinformation and defend our tax status. We saw national and state credit union organizations put aside differences and work in unison, because we all understood the stakes.
That kind of relentless, coordinated effort is what it takes to win. And we will need even more of it going forward. The bank lobby isn’t going away; if anything, they’re regrouping for the next round. We must be prepared to move from defense to offense – leading the conversation, not just reacting. We have truth and public interest on our side, but we have to make our voice heard where it matters most.
Let’s remember why we fight: not for a tax break itself, but for what that break enables us to do. It enables us to offer a better deal to an Army private buying her first car, to approve a mortgage for a young family that a for-profit bank might overlook, to provide financial counseling to a veteran trying to rebuild his credit.
Our tax status is earned by the everyday, real-life benefits we deliver to our members and communities. As long as we never lose sight of that purpose – and make sure Congress doesn’t either – we will continue to merit the public’s trust and support.
Just One Battle
H.R. 1 was just one battle; the broader war to protect credit unions is far from over. But I am more confident than ever that we can win it. We will win by rolling up our sleeves every day and doing what credit unions do best: working together, putting people before profit, and proving our value through action. To my fellow credit union leaders, professionals, and members: let’s keep our guard up and our purpose clear.
We must be vigilant, we must be passionate, and we must be loud about the good we do. The banks aren’t about to quit – and neither are we. By staying united and doubling down on advocacy, we will ensure that credit unions not only survive these attacks, but thrive long into the future, continuing to serve millions of Americans. The fight to protect our tax status isn’t over – but with our collective dedication,
Connective Tissue
At DCUC, we are committed to being the connective tissue that links military-focused credit unions to the broader credit union movement, and to the policymakers who hold our future in their hands. We don’t just represent institutions, we represent the people behind them: the sailor trying to buy his first home, the military spouse starting a business, the veteran seeking financial stability in civilian life. Our mission is rooted in service—and that service must extend to the halls of Congress and beyond.
This moment presents a challenge and an opportunity. We can either wait for the next attack and scramble to respond, or we can use this reprieve to build a stronger, more united front. We chose the latter.
So yes, the absence of harmful language in the current tax bill is a win—but it is not the war. The real victory will come when lawmakers recognize the irreplaceable role credit unions play in building financial resilience, especially for those who sacrifice the most for our country. And that recognition won’t come from silence, it will come from strength, strategy, speaking up, and keeping boots on the ground on Capitol Hill.
DCUC is ready. Let’s move forward—together.
Jason Stverak is the Chief Advocacy Officer of the Defense Credit Union Council (DCUC). The views expressed are his own, on behalf of DCUC, urging the credit union community to unite in protecting their tax-exempt status through active engagement and advocacy.
