WASHINGTON, D.C (May 5, 2025) |
Early this morning, the Defense Credit Union Council (DCUC) sent a letter to House Ways and Means Committee Chairman Jason Smith and Ranking Member Richard Neal, urging lawmakers to preserve the federal tax-exempt status of credit unions as Congress considers potential tax reforms.
In the letter, DCUC Chief Advocacy Officer Jason Stverak shared the vital role credit unions— especially those serving the military—play in supporting over 40 million Americans, including active-duty servicemembers, veterans, and their families.
“The credit union tax exemption is not a special favor,” says Stverak, “it reflects our not-for profit, member-owned structure and mission to serve those often overlooked by for-profit banks. Taxing credit unions would effectively raise costs for millions of working families while weakening financial access for military communities.”
DCUC highlighted the value provided by credit unions, including lower fees, competitive rates, and access to essential financial services on military installations—often in remote or underserved areas where traditional banks are absent; strengthening financial readiness and national security.
Key points in the letter include:
Consumer and Economic Impact: Credit unions return $37 billion annually to members through better rates and lower fees. A recent economic study estimated that eliminating their tax exemption would shrink U.S. GDP by nearly $266 billion over the next decade and result in 822,000 lost jobs.
Misconception of “Tax Loss”: The estimated $2.9 billion annual cost of the tax exemption yields over $297 billion in economic output—a return of more than $100 for every $1 of forgone federal revenue.
Risks to Communities: Removing the tax exemption would force smaller credit unions to close or consolidate, leaving military bases and underserved neighborhoods vulnerable to predatory lending and financial exclusion.
DCUC also challenged claims of “unfair advantage,” noting that for-profit banks benefit from numerous tax strategies without delivering the same reinvestment to consumers or communities. DCUC called for any review of credit union tax status to be accompanied by a full examination of bank tax practices.
DCUC continues to urge the Committee and congressional leaders to reaffirm support for credit unions, warning that any attempt to alter their tax status would be a direct blow to middle-class families, veterans, and local economies.
“Protecting the credit union tax exemption means protecting financial opportunity for millions of Americans, especially those who serve our country,” says Anthony Hernandez, DCUC President/CEO. “Now more than ever, we must share the credit union difference and what’s at stake for the communities our institutions serve.”
For more information, please contact Jason Stverak at jstverak@dcuc.org and visit dcuc.org/advocacy.