Joint letter urges senators to secure credit union tax status

June 10, 2025

Every state league joined together with America’s Credit Unions in a joint letter sent Monday to Senators urging their support in securing the credit union tax status in the budget reconciliation bill the One Big Beautiful Bill Act (H.R. 1). The Senate is currently working on its version of H.R. 1, which passed the House last month with the credit union tax status untouched.

“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. Economic activity and benefits passed on to their members indirectly leads to billions in tax revenues for federal, state, and local governments; and
  • 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.

America’s Credit Unions also signed onto a joint letter with dozens of credit union and community development organizations urging Senate leaders to protect the tax status.

Stakeholders are encouraged to contact their senators through the Don’t Tax My Credit Union website.

The Senate Banking Committee released the text of its portion of the reconciliation bill, which includes provisions to:

  • Decrease the CFPB’s funding cap from 12% of the Fed’s 2009 inflation-adjusted profits to 0%, requiring the CFPB to request funds via appropriation;
  • Move non-monetary policy-related Federal Reserve employees to a new pay scale, adjusting salaries to approximately the same as employees at the Department of the Treasury;
  • End the Treasury’s Office of Financial Research, while providing Treasury authority and fund to maintain the Secured Overnight Financing Rate;
  • Transfer the Public Company Accounting Oversight Board to the Securities and Exchange Commission (SEC) and ensures that the SEC assumes its duties;
  • Postpone the implementation of the CFPB’s small business loan reporting requirements under section 1071 of Dodd-Frank until 2034 (the CFPB has also indicated it will not enforce the rule);
  • Rescind unobligated funds from the Inflation Reduction Act to the Treasury;
  • Sweep the unused portion of the SEC’s Technology Fund into the Treasury and prevent the fund from being used in the future.