By Ray Birch
WASHINGTON--Credit union industry veteran Larry Blanchard is warning of a potentially uncertain future for the movement, amid swirling speculation over the sudden removal of two NCUA board members and increased attention from lawmakers on the industry's long-standing tax exemption.
“When Congress starts debating if they're going to tax widows, orphans, and puppies—we need to watch out. And that’s where we are,” said Blanchard, a veteran credit union communications and advocacy professional, currently a public affairs consultant for TruStage.
Blanchard led CUNA Mutual Group’s corporate and legislative affairs office until retiring in 2008 and was a key figure behind the 1996 Credit Union Campaign for Consumer Choice, which was instrumental in passing the Credit Union Membership Access Act (H.R. 1151). He also held senior leadership roles at CUNA, NAFCU and NCUA.
Now, the veteran credit union strategist sees striking similarities between the charged political climate of the H.R. 1151 era and today’s environment in Washington.
“Yes,” he said flatly when asked if he believes the credit union tax exemption is at its greatest risk in 2025. “There’s more talk about it on Capitol Hill. Several members of the House Ways and Means Committee are interested in seeing credit unions taxed. That’s not new, but more strident.”
NCUA's Issues
The renewed scrutiny of credit unions’ tax-exempt status comes at the same time the NCUA is facing leadership turmoil. As CUToday.info reported, NCUA Democratic Board Members Todd Harper and Tanya Otsuka were recently removed—under still-unclear circumstances—prompting concern that a broader restructuring of federal financial regulators may be in play.
A document often cited in this context is Project 2025, a policy agenda circulating in conservative circles that proposes the consolidation of federal agencies.
“There’s a theory—unconfirmed but plausible—that this is a precursor to folding credit unions into the banking system,” Blanchard warned. “We just don’t know yet.”
Though uncertainty surrounds the future structure of the NCUA, Blanchard urged credit unions to remain calm—but not complacent. Muddying the waters, too, is the lawsuit filed by Harper and Otsuka against the Trump Administration that asserts the firings are unlawful.
“Take deep breaths and let’s wait and see what happens at the agency. But just like we did with Operation Grassroots in the 1990s, we need to be ready to align quickly and act decisively if the time comes,” he said.
Blanchard vividly recalls that 1990s fight, when the credit union movement rallied tens of thousands of supporters on the National Mall and at state capitals to protect the independence of NCUA and the Share Insurance Fund.
“We had to organize like never before,” he said. “And we may need to do it again.”
In addition to the leadership vacuum at NCUA, which is now functioning with just one board member, Chairman Kyle Hauptman, concerns are mounting over how long this unorthodox structure can last. Hauptman’s term is set to expire in August, though by statute, he can remain in place until a successor is confirmed.
Still, Blanchard insists the agency isn’t paralyzed.
“The staff is competent. The examiners are doing their jobs. It’s not in limbo, but we do need clarity,” he said.
Continue Mobilizing
Turning back to the tax fight, Blanchard said the industry needs to continue mobilizing—not with panic, but with purpose.
“Work with your trade associations. Stay calm, but be prepared. It only takes one or two voices going off-message to destroy the kind of alignment we need right now,” he said. “When all this was happening in the late ’90s, the general consensus is that CUNA could have gotten it done, NAFCU could have gotten it done. And the leagues could have gotten it done. But if all three worked on this independently, coming up with different strategies, all three efforts would have been undermined. The goal was for all of us to come together. We did, and we opened a big tent, and it worked.”
Reflecting on past successes, Blanchard credits the blend of strategic political expertise and disciplined "military-style operations" that helped secure H.R. 1151.
“Back then, we had Marine Corps General Ken Robinson, and political tactician Dan Mica. We’re seeing a similar blend emerge now with leaders like the Defense Credit Union Council’s Tony Hernandez, an Air Force colonel and commander, and America’s Credit Unions’ Jim Nussle, who was an Iowa congressman and is a former director of the Office of Management and Budget. That kind of teamwork is critical.”
Asked again whether he is truly worried the tax exemption could fall this year, Blanchard, who has helped credit unions ward of many threats over the years, didn’t hesitate in stating, “Yes.”
“The stakes are high,” he said.