ACU Pushes Back On ABA Survey, Says Banks Are 'Blatantly' Distorting Credit Union Tax Facts

WASHINGTON--Every day in every corner of the country, credit unions make a noticeable difference in the lives of their members. Yet, despite their impact, credit unions continue to face "blatant" attempts by banks to distort the truth, asserted America's Credit Unions, reacting to a new ABA survey.

As CUToday.info rep-ported here, the ABA has released a new study that asserts the majority of U.S. consumers (67%) believe that Congress should reexamine the tax-exempt status of federal credit unions while only 14% opposed such a hearing.

ACU asserted that banks consistently misinform consumers about the tax status of credit unions and why the cooperative finance model is essential to economic freedom, and merits protection.

“Economic freedom within our country is under attack by banks," said Scott Simpson, president/CEO of America’s Credit Unions. "Their latest ‘survey’ is an egregious attempt to mislead policymakers and consumers; an effort to eliminate a threat to their profits. Credit unions, and their cooperative finance model, are essential to financial security and prosperity for millions of Americans across our country. When given the facts, consumers overwhelmingly support expanding access to credit unions and protecting their not-for-profit tax status. If banks had it their way, consumers would be forced to pay billions of dollars more to access financial services through institutions with a track record of questionable behaviors that compromise people’s livelihood. Credit unions are here to protect people against that."

ACU addressed "hard facts" about credit unions’ status as “nonbanks”; credit union tax status; why banks choose to sell to credit unions, and how we serve small and large credit unions alike. Below are remarks from ACU:

Disproving ABA’s biased survey

• One of the glaring issues with ABA’s recent survey is that it attempts to lump credit unions into the category of “nonbanks,” such as fintechs.
  • Both credit unions and banks are insured depository financial institutions subject to rigorous federal regulation and supervision, and consumer deposits are insured equally up to $250,000.
  • Both credit unions and banks are held to the same federal and state consumer protection standards. In fact, credit unions are subject to several stricter statutory limitations. Credit unions are the original consumer protectors.
    • ABA’s attempt to lump credit unions into the same “nonbank” category of fintechs, which do not have the same regulatory oversight or consumer protection standards, is egregiously misleading.
• 83% of respondents in ABA’s survey were unaware credit unions don't pay federal taxes (17% knew, 57% "don't know/no opinion").
  • According to a 2025 national consumer poll conducted by Harper Polling and Frederick Polls:
    • A 64% majority of Americans want to KEEP the current tax exemption in place for credit unions. This support grows to 78% following exposure to messaging that explains how credit unions’ not-for-profit status allows them to:
      • Help small business and local economies grow
      • Share earnings with member-owners
      • Keep earnings in the community rather than shipping them out to Wall Street Investors
    • 79% agree "Americans would be better off financially if more were to use credit unions than banks"
      • 94% approve (46% strongly) of "Allowing credit unions to expand into more communities and provide more loans to small business as a way to promote economic growth.
      • 86% have interest in either doing a greater share of their personal banking with a credit union or joining one.

Credit unions are not banks’ biggest threat

• According to the Conference of State Bank Supervisors (CSBS) Annual Survey of Community Banks, community banks overwhelmingly identify large banks and other community banks as their primary competitors, not credit unions.  
• Banks hold a near monopoly, with credit unions representing less than 10% of market assets
• The two largest banks in the U.S. are larger than the entire credit union industry
  • 50% of credit unions have less than $62 million in total assets
• Banks have 91% of assets, 91% of deposits, 89% of loans. But the mere fact that credit unions exist and serve their members the way they do, puts downward pressure on their pricing, their margin.
• Bank earnings are nearly double that of credit unions (2025Q1: 1.17% among small banks, 1.16% large banks, 0.67% at CUs)
  • Bank earnings are increasingly reliant on trading revenues, which are currently at about $63.4 billion; compared to credit unions’ earnings of $14.7 billion
  • Community bank earnings in 2024 were 70% higher than those of large credit unions
• Since 2012, large credit unions have added nearly 500 net branches while banks have closed approximately 20,000
• Only 10% of credit unions have over $1 billion in assets — yet they operate more than half of the 900 credit union branches in areas that would otherwise be banking deserts. 

The facts behind credit unions’ tax status

• Bank attacks against the credit union tax status are about eliminating a competitor within the financial services marketplace—not about “fairness” as the bankers claim
• Credit unions are made for Main Street. Banks are made for Wall Street.
  • Lending data shows that credit unions have a much higher share of loans to households compared to banks.
• Credit unions and their more than 144 million members bear a significant tax burden – property, sales, real estate, payroll and more – while bank tax rates have declined.
• A new tax on credit unions would hurt hard working Americans—teachers, farmers, military members and veterans, first responders, and small business owners
  • Attempts to tax only the largest credit unions are misguided; more than half of members of the nation’s largest credit unions are military members.
    • A credit union is a credit union because of its mission, not size
• The credit union difference is clear:
  • With the not-for-profit tax status, credit unions generate $27.5 billion in direct benefits and $38.3 billion in total benefits for American consumers. Congressional budget estimates put the cost of the credit union tax status at $3 billion per year. That’s a 1,200% return on the government’s investment.
  • 89% of credit union members say their credit union has improved their financial well-being
  • While banks are focused on Wall Street, credit unions are focused on Main Street – and make more than 90% of their loans to households.

The facts behind banks selling to credit unions

• Sales are initiated by banks. Mergers are voluntary and require a community bank's board of directors to vote on merging with a credit union. Sales often occur in pursuit of better consumer/community outcomes, mission alignment, and long-term viability
• The credit union structure (not-for-profit and member-owned model) makes transactions logical and beneficial to communities particularly those underserved by larger institutions.
• Since 2012, $1.77 trillion in bank assets have been merged with credit unions making up just $6.5 billion (0.3%) of those mergers. Banks have sold to other banks more than 2,000 times during the same period, with fewer than 40 banks sold to credit unions.
• Structure and service – not size – defines credit unions. Expansion — whether through mergers, acquisitions, or new branches — is driven by member benefit, not institutional self-interest.
• LOCAL IMPACT: When community banks close or sell, credit unions often step in to preserve local access, keep staff in place, and offer products without punitive fees or shareholder pressure.
  • Since 2012, banks have closed 20,000 branches, while credit unions have opened 650 net branches.

If ABA wants to know how consumers truly feel about banks and credit unions, we suggest adding these questions to their next survey:

1. Knowing that the four largest U.S. banks paid a combined $150 billion in fines and settlements for fraudulently selling toxic mortgage-backed securities, rigging interest rates, illegally foreclosing on homeowners, and enabling Bernie Madoff’s Ponzi scheme — all while receiving hundreds of billions in taxpayer bailouts — which of the following comes closest to your view?
   1. Congress should immediately launch a full investigation into why the banking industry still enjoys special legal protections, massive tax loopholes, and “too-big-to-fail” subsidies.
   2. Banks have suffered enough and deserve even lighter oversight going forward.
   3. Don’t know / I still think credit unions are the real problem
2. Recent studies have found that the lower loan rates and fees offered at credit unions keep banks from raising costs on their customers by providing competition. Would you like to:
   1. Pay almost $9 billion more in fees because credit unions are eliminated
   2. Have access to safe affordable financial services products at a credit union
3. Over 1/3 of banks do not pay taxes because they utilize the Subchapter S exemption in the tax code. Unlike not-for-profit credit unions, which return any profits to their members because of their cooperative structure, Subchapter S banks send profits to Wall Street investors. Which comes closest to your view:
   1. Subchapter S banks should be required to file Form 990 like the ABA is asking of federal credit unions
   2. Subchapter S banks should pay taxes like the ABA is asking of credit unions
   3. Congress should hold hearings on Subchapter S banks abuse of the tax code
4. Each of America’s four largest banks now holds more assets than the entire $2.4 trillion credit union industry combined — yet somehow the banking lobby still spends millions every year telling Congress that not-for-profit credit unions are the real competitive threat. Knowing this, which comes closest to your view?
   1. It’s adorable that trillion-dollar megabanks are scared of member-owned co-ops that give the profits back to military members, teachers, and nurses
   2. No, credit unions are clearly an existential danger to yacht maintenance funds
   3. Don’t know / I’m still laughing too hard to answer