WASHINGTON—Credit unions cleared a key tax hurdle Monday, as the House Ways and Means Committee’s full draft of its reconciliation bill made no mention of altering credit unions’ tax-exempt status, according to sources in Washington, who also noted the win could be even bigger than anticipated.
CUToday.info has learned that GOP members have been asked not to submit amendments to the House tax bill—a key avenue through which the CU tax break could be added to legislation in the coming weeks.
As CUToday.info reported, the committee begins marking up its tax legislation bill Tuesday, starting at 2 p.m. ET. A copy of that text was leaked to the media Monday.
Early Monday, both America’s Credit Unions and the Defense Credit Union Council, which have been working diligently to keep credit unions out of the tax bill, stated they were cautiously optimistic that this initial document would exclude the CU tax break.
As CUToday.info has extensively reported, credit unions have been fighting hard in 2025 to preserve their tax break amid a great deal of uncertainty regarding the future of the tax exemption. Much of the concern has centered on the credit union tax break appearing on a House GOP document that lists the possible "pay-fors" for the budget bill.
DCUC, ACU and Washington credit union advocate John McKechnie reminded that Monday’s win is just preliminary, as the House works to finish its version of the tax bill by Memorial Day, before passing it on to the Senate.
“I realize that, on the Hill, nothing is final until everything is final. But the fact that the credit union tax exemption is not mentioned in this initial iteration of the Ways and Means bill is an unquestionably positive sign,” McKechnie said. “And it should be noted that the credit union community put a tremendous amount of work into making sure that the exemption is safe.
“We have the right policy arguments about consumer benefit, but the political case was also made quite well by credit union activists who saw the threat clearly, and acted,” McKechnie said. “It should be noted that since last fall a large number of credit union allies on Capitol Hill told us to sharpen our pencils, to be ready to stand up, to be very proactive. I’m glad we listened.”
DCUC Chief Advocacy Officer Jason Stverak reminded that getting through the Ways and Means Committee initial draft unscathed is obviously a big hurdle.
“But now you have to look at rules, and there's always the possibility of adding amendments that might include adding the CU tax exemption,” said Stverak. “This is just the continual process of making the legislative sausage. But again, my worry—as it always has been—is that 2:00 in the morning, in a meeting of a few committee members, somebody decides they need to find $30 to $50 billion more, and they add in the credit union tax status. So, while if we have a victory this week, by no means is DCUC stating the war is over.”
America's Credit Unions thanked Chairman Jason Smith and the House Ways and Means Committee members for recognizing the value of protecting the credit union tax status in their proposed reconciliation bill.
“Together with leagues, credit unions, and industry partners, we have worked hard to show the impact credit unions have on their 142 million members and communities. We remain engaged with the committee as it considers amendments through the markup process to ensure no new tax is added on credit unions. Credit unions are here to strengthen Main Street, and we will keep our momentum," said Jim Nussle, America’s Credit Unions president/CEO.
But what could be a boost to credit unions’ continuing fight, a Washington source told CUToday.info, is that GOP members have been asked not submit amendments to tax bill.
ACU President and CEO Jim Nussle, Monday, reminded that ACU has been focused on keeping credit unions out of the tax bill. However, if the credit union tax exemption appeared in the initial House draft, the trade group was ready with an amendment to get credit unions out of the bill. Nussle said that amendment has enough votes to pass.