Joint Letter Urges Senators to Preserve Credit Union Tax Status

The MD|DC Credit Union Association, together with every state league and America's Credit Unions sent a joint letter Monday to Senators urging their support in preserving the credit union tax status in the budget reconciliation bill. The Senate is currently drafting its version of H.R. 1, which passed the House last month without any changes to the credit union tax status.

"Any effort to change the tax status of credit unions as part of this reconciliation bill would be Congress doubling down for big banks while increasing taxes on 142 million Americans who are credit union members," the letter reads.

The organizations emphasize:

• Credit unions remain overwhelmingly focused on making loans and providing services to American households.
• Credit unions remain a small percentage of the financial services marketplace, while small banks face increased competition from big banks.
• Tax breaks for banks in the 2017 Tax Cuts and Jobs Act far outweigh the credit union tax exemption.
• Credit unions pay billions in taxes to federal, state, and local governments in the form of payroll and various excise taxes, not to mention the tax revenue they help generate from their employees.
• Credit unions return value from the tax status to members, delivering an estimated $35 billion in financial benefits in 2024, compared to an estimated $2.6 billion value of the tax status.