Bank lobbyists want you to think banks and credit unions are the same – but the facts say otherwise. The truth is, when credit unions thrive, so do the 140 million consumers and communities they serve.
Credit unions remain the only member-owned, not-for-profit financial institutions in the country, governed by volunteer boards and dedicated to advancing local communities. More than half of credit unions are designated as low-income institutions, serving 43% of all Americans, yet hold only 8.8% of the assets in financial institutions.
What bank-backed Shelia Bair failed to mention in a recent op-ed against credit unions’ tax status, is that unlike banks, credit unions are financial cooperatives that exist to serve their members and stand up for Main Street – not Wall Street. Eliminating the tax status would jeopardize the financial well-being of farmers, veterans, teachers, and underserved communities who rely on them for affordable loans and lower fees.
Despite misleading messaging from the banking industry, credit unions contribute significantly to the economy. They paid $36.3 billion in taxes in 2023 alone – including $23.3 billion in federal taxes and $13 billion in state and local taxes. They do not pay the federal income tax on profits because profits are returned to their members and the member-owners of the credit unions pay taxes.
Meanwhile, banks are thriving, holding 91.2% of the market and enjoying billions in tax benefits. Subchapter S banks alone receive $1.1 billion annually in tax breaks, yet independent research shows they don’t pass those savings on to consumers.
Since 2012, banks have closed 20,000 branches nationwide while credit unions have opened 562 branches in that same period. Credit unions have begun curing financial deserts. In 2024,119 bank deserts were fully or partially cured with credit unions responsible for 35.7 percent of them.
Polling from December 2024 confirms that Americans overwhelmingly support credit unions. Nearly 70% of voters want Congress to oppose any tax increases, and support for maintaining credit unions’ tax status grows when voters learn about the industry’s impact.
Credit unions are not relics of the past; they are evolving to meet modern needs while keeping to their mission. Taxing them like banks would threaten their existence and limit financial access for millions of working Americans. Congress must stand with consumers – not the bank lobby – and preserve the tax status that allows credit unions to continue serving their communities, just as they have for the last 90 years.
