Senate passes reconciliation bill leaving credit union tax status secure

In a major victory for the credit union industry, the Senate advanced H.R. 1 Tuesday without any mention of the credit union tax status. The bill narrowly passed with a 51-50 vote, with Vice President J.D. Vance breaking the tie after nearly 20 hours of negotiations on the floor and multiple reports that Senate Republicans were working through the night to secure the needed 50 votes.

The latest movement on H.R. 1 without changes to the tax status follows months of unified advocacy by America’s Credit Unions, leagues, credit unions, and their members. A document outlining what provisions in the Senate-passed version will affect credit unions is available here.

“We thank the U.S. Senate for securing the credit union not-for-profit tax status and not adding a new tax on 142 million credit union members as part of H.R. 1,” said Jim Nussle, America’s Credit Unions president/CEO. “Hard-working Americans and their communities rely on the competitive rates and personally tailored services offered by credit unions to achieve the American Dream. By preserving the credit union tax status, it provides consumers across the country with more opportunities to achieve financial freedom.”

The bill now heads back to the House for consideration, where lawmakers will hash out differences between the two chambers’ bills. The House Rules Committee met on the bill Tuesday afternoon to set up floor consideration of the Senate-passed H.R. 1 this week. America’s Credit Unions wrote to House leaders Tuesday afternoon, urging them to “reject any changes or efforts that would harm credit unions or the members they serve as this legislation moves forward towards final passage in the House of Representatives.”

President Donald Trump has called for a final bill before July 4, though that timeline could fluctuate as lawmakers work through changes. Any additional bill revisions must be approved by both the House and Senate. 

Early committee documents listed the credit union tax status as a possible “pay for” in the budget reconciliation bill. America’s Credit Unions led an industry-wide effort through the Don’t Tax My Credit Union campaign to emphasize the credit union difference and impact on communities. With a united effort, the credit union tax status was left untouched throughout the entire process—from the initial draft bill in the House, through markup and amendment process, and through the Senate process.  

Prior to the Senate vote, senators received a letter signed by more than 750 credit union leaders urging them to ensure the credit union tax status remained protected through the floor vote. As part of the Week of Action, America’s Credit Unions also sent daily messages to Senate offices reinforcing how the tax status supports the positive impact credit unions make in the lives of more than 142 million Americans.

To date, the Don’t Tax My Credit Union campaign has generated more than 861,000 grassroots letters directly to lawmakers. Its digital ad campaign targeting key tax writers and congressional leaders generated over 128 million ad impressions and engaged over 191,000 activists.

America’s Credit Unions and credit union stakeholders’ advocacy efforts are ongoing to secure the credit union tax status through final passage and the president’s signature.