Tax Foundation calls for end of credit union tax exemption

The nonpartisan Tax Foundation released a new report calling on policymakers to wean credit unions off taxpayer subsidies.

Report Details: In the report, President Emeritus Scott Hodge cites the diminished role of credit unions’ field-of-membership and common-bond restrictions as well as questions about their dedication to people of modest means. With credit unions now acquiring banks, he says, fairness and equity demand that credit unions be put on the same tax footing as the banks they compete with.

Growing Interest in CU Policy: Attention to credit union policy has grown amid ICBA efforts to raise questions about the industry’s tax exemption and acquisitions of community banks. ICBA has called on congressional committees to convene a hearing on credit union oversight following reports of discriminatory lending at Navy Federal Credit Union, and ICBA President and CEO Rebeca Romero Rainey recently noted on X that 20% of this year’s bank acquisitions are by credit unions.

Eyes on NCUA: A recent Federal Reserve Bank of Atlanta report noted the National Credit Union Administration has no enforcement authority over third-party service providers, posing risks to credit unions and their members. As ICBA has testified before Congress, it supports allowing the NCUA to directly examine and regulate credit union service organizations and other third-party providers, which has contributed to ICBA-supported legislation to grant the NCUA such authority.

More on Credit Unions: As part of ongoing efforts to bring attention to credit union acquisitions of community banks, ICBA:

Launched targeted ads and a new website making clear to consumers that “Something’s Wrong” with credit union policy.

Renewed its call for Congress to act on credit union bank acquisitions.
Encourages community bankers to use its Be Heard grassroots action center to call on Congress to hold a hearing on NCUA oversight.
Offers additional resources on its website.