WASHINGTON—America's Credit Unions, the American Association of Credit Union Leagues, and state and regional leagues representing all 50 states and D.C. have sent a letter to Treasury Assistant Secretary for Tax Policy Kenneth Kies, defending credit unions' mission and calling out “banker hypocrisy.”
The letter follows 52 state bankers associations this week calling on Treasury to examine whether credit unions still align with the intent of their tax-exempt status.
“This broad coalition emphasizes unity across the credit union movement in defending against misleading attacks from the banking industry. Because ultimately, it’s not size but mission that defines a credit union,” ACU said.
Key points from the letter:
- Serving those who need affordable banking solutions: Credit unions serve members who earn less than half what the average bank customer earns, with significantly lower net worth.
- Economic impact: The credit union tax exemption costs the government $3 billion annually but delivers over $37 billion in consumer benefits—a 1,200% return on investment
- Market share reality: Banks are essentially a monopoly in financial services. Credit unions hold less than 10% of total industry assets, the same share they've maintained for many years.
- Branch expansion: While banks have closed over 20,000 branches in the past 13 years, credit unions have added hundreds, filling gaps in underserved communities.
- Transparency: Credit unions file quarterly reports with 3,400 data fields to the NCUA, compared to the IRS Form 990's 250 fields. One-third of banks are organized under Subchapter S and pay no federal income taxes, yet don't file Form 990s either.
“This latest exchange highlights the ongoing tension between credit unions and banks over market competition and regulatory treatment, particularly as credit unions continue growing their membership—now serving 144 million Americans,” ACU said. “The needs of American consumers are ever evolving that there is no need to raise the alarm unnecessarily, especially when 90% of credit union members report they actually trust who they bank with—not a statement many banks can say with conviction.”
As CUToday.info reported, the Defense Credit Union Council, in response to the bankers' move, sent a letter Wednesday to Kies urging Treasury to launch a formal review into the implications of banks operating under Subchapter S corporation status.