As the tax-exempt status of credit unions is currently being debated in Washington, credit unions are working together to amplify the collective voice of credit unions and preserve their tax-exempt status.
Credit unions have been exempt from taxes for nearly 100 years due to their not-for-profit, member-owned structure. However, recent discussions on Capitol Hill have sparked concern that their tax exemption could be on the chopping block. If the tax-exempt status was eliminated, the cooperative model unique to the 4,617 credit unions across the country would be dismantled. Further, it could lead to an increase in fees for the 142 million who are members of credit unions.
The effort to make the voice of credit unions head is being spearheaded by Pennsylvania-based Members 1st Credit Union, which serves about 600,000 members.
“This is not just about protecting our credit union—it is about protecting the entire industry representing the more than 140 million Americans who choose credit unions to meet their consumer and small business needs,” Michael Wilson, president & CEO of Members 1st Federal Credit Union, said. “Every dollar credit unions earn is reinvested in their members—helping families buy homes, empowering small businesses to grow, and supporting thousands of community organizations that provide critical services.”
Members 1st has spearheaded ongoing communication between credit unions across Pennsylvania, New Jersey, and Washington, DC, to encourage collaboration and the sharing of advocacy materials and resources.
“Credit unions are not just financial institutions—we are neighbors, friends, and partners in helping people achieve financial well-being,” Amey Sgrignoli, president & CEO of Belco Community Credit Union, said. “From first savings accounts to first homes to retirement planning, credit unions provide generational financial support for every season of life. Losing our tax-exempt status would threaten that ability, especially for small, regional credit unions that serve local neighborhoods.”
Members 1st is also working alongside national and regional partners, including the Defense Credit Union Council (DCUC), CrossState Credit Union Association, and America’s Credit Unions (ACU), to amplify the voice of credit unions.
“We are making sure the credit union difference is heard and understood on Capitol Hill and in national media,” Anthony Hernandez, president & CEO of DCUC, said. “By working alongside partners across the credit union system, we are united in protecting the federal tax exemption that allows credit unions to serve 140 million Americans through more than 4,600 federally insured institutions.”
The leaders of Members 1st, Belco Community, and DCUC recently penned an editorial on the subject that appeared in CU Today.
“This is about preserving the credit union industry that has helped generations of Americans thrive,” Wilson said. “We will never stop fighting for them.”