Tax Reform Has Eliminated the Need for Credit Union Favoritism

If Ronald Reagan was right that the “nearest thing to eternal life we'll ever see on this earth” is a government program, then the second closest thing to eternal life must be a federal tax subsidy.

Credit unions were designed to be nonprofit financial institutions that serve a narrowly defined base of members underserved by traditional banks. Congress approved the federal chartering of credit unions in 1934 during the depths of the Great Depression when many working Americans, such as farmers and blue-collar laborers, had little access to commercial banking. In 1937, Congress exempted federally chartered credit unions from federal income tax and, in most cases, state income taxes.