By Jason Stverak
The Independent Community Bankers of America (ICBA) is once again trying to eliminate competition by pushing a tax on credit unions—this time targeting those with assets over $1 billion.
This proposal is not about fairness; it is an outright attack on the financial institutions that serve millions of hardworking Americans, including our nation’s military service members, veterans, and their families.
As the Defense Credit Union Council (DCUC), we represent credit unions that serve those who serve our country. Our institutions provide critical financial services to military families worldwide, often in locations where banks have abandoned them. The ICBA’s latest proposal would not only harm credit unions but directly impact military readiness, financial stability, and the well-being of those who sacrifice for our nation.
Defense credit unions are more than just financial institutions; they are an essential part of the military community. They operate on bases, support service members through deployments, and ensure that military families have access to fair and affordable financial products—something banks have largely failed to do.
Taxing defense credit unions would force them to cut back on the very services that make a difference for our troops, including:
• Low-interest emergency loans that prevent predatory lenders from preying on young service members.
• Financial education programs that help military families budget through deployments, PCS moves, and transition to civilian life.
• Increased mortgage access for veterans and active-duty members who rely on VA loans to achieve homeownership.
• Fee-free services that ensure service members are not nickel-and-dimed while they are stationed overseas or serving in combat zones.
Steadfast Commitment
Unlike many banks, which chase profits and close branches in less profitable areas, defense credit unions remain steadfast in their commitment to serving military families, no matter where duty calls.
Let’s be clear: Banks have had every opportunity to serve the military, yet many continue to reduce their presence on bases and in military communities. Since 2004, the number of banks on military installations has declined by more than 40%, while defense credit unions have remained committed to providing essential financial services to our troops.
At the same time, ICBA banks enjoy their own tax breaks through Subchapter S status and other exemptions, all while benefitting from taxpayer-funded bailouts, FDIC protections, and federal subsidies. Their attempt to label credit unions as “too big” is nothing more than a misleading attempt to push out competition and steer service members into higher-cost financial products.
Taxing Credit Unions Hurts Military Readiness
Financial stress is a top concern for military leaders because it directly affects force readiness and retention. The Department of Defense has repeatedly emphasized that financial security is mission-critical—service members distracted by debt, predatory loans, and financial instability cannot fully focus on their duties.
By taxing credit unions, the ICBA is proposing to weaken one of the few institutions that actively support military financial readiness. The result? Higher costs, fewer resources, and more service members turning to high-fee banks and predatory lenders when they need financial assistance the most.
Congress Must Reject This Anti-Military Proposal
The ICBA’s proposal to tax credit unions with assets over $1 billion is not about fairness—it’s about eliminating competition. If passed, this tax would harm military families, weaken financial readiness, and force defense credit unions to scale back critical services that banks have failed to provide.
“Defense” credit unions were created to serve those who serve or have served our nation. For decades, they have understood the unique challenges service members face throughout their military lifecycle—from enlistment to TDYs or deployments, relocations, and even post-service life. These credit union members include active duty, reservists, guardsmen, veterans, DoD contractors, and their families. Credit unions saw the lack of tailored services, products, and support available to these communities, and are still dedicating their institutions to filling these gaps today. Our concern is the ICBA and other bank lobbying arguments are hyper fixated on competition and responding to their industry’s own stressors, blurring their vision of what their calls for new regulations could mean for the financial impact on America’s communities.
As leading financial cooperatives, credit unions remain committed to their mission and ethos as member-centric, community-focused institutions. Preserving and upholding the long-standing credit union tax status is imperative in ensuring our military and veteran communities retain the best financial services and support from America’s financial institutions. Credit unions continue to prioritize providing financial prosperity and stability to the very individuals who dedicate their lives to defending our freedoms.
We urge Congress to reject any attempt to tax credit unions and stand with our service members, veterans, and their families. At a time when military families already face economic challenges, lawmakers must choose: Will they stand with our troops, or will they stand with the banking lobby trying to squeeze more profits at the expense of those who serve?
The choice is clear.
Jason Stverak is Chief Advocacy Officer at the Defense Credit Union Council.