By Jason Stverak
Ahead of the ICBA Washington Summit, policymakers and industry leaders should expect to hear a familiar script: that credit unions have somehow drifted so far from their cooperative mission that Congress should punish the charter itself. That script is not just aggressive advocacy.
It is built on mistruths. ICBA is publicly claiming that credit unions are “weaponizing” a tax subsidy and benefiting from “lax regulatory standards” (ICBA, “Credit Union Tax Exemption,” unsourced), that acquisitions of community banks “lack transparency” and use “members’ savings to buy out bank owners in largely private deals” (ICBA, “Regulatory Update: Credit Unions,” Feb. 2026,” Mar. 9, 2026, https://www.icba.org/w/icba-unveils-campaign-to-spotlight-credit-union-deceptions). Those are serious accusations. They are also serious distortions of the law, the data, and the everyday work of credit unions serving military families, veterans, and communities across America.
The tax-status argument collapses under primary-source scrutiny
Let us start with the core of ICBA’s campaign: the claim that credit unions’ federal tax status is somehow “unwarranted.” Congress itself has already answered that question. In the Credit Union Membership Access Act findings, Congress reaffirmed that credit unions are exempt from federal and most state taxes because they are member-owned, democratically operated, not-for-profit cooperatives with a specific mission of meeting the credit and savings needs of consumers, especially persons of modest means (U.S. Code / govinfo, 12 U.S.C. 1751 note). NCUA continues to describe federal credit unions as not-for-profit and tax-exempt institutions, and the IRS continues to maintain official exemption guidance for federal and state credit unions (NCUA legal opinion).
That matters because ICBA wants to turn a policy disagreement about certain large institutions into a charter-wide attack on the cooperative model itself. But size is not the legal test. Structure, mission, ownership, and public purpose are. A member-owned cooperative does not become a bank because it grows. It remains a cooperative because it has no stockholders demanding quarterly extraction, because its members own it, and because its earnings are returned in better rates, lower fees, capital strength, and community service.
The acquisition and oversight narrative is equally misleading
ICBA’s campaign has lately focused on bank-to-credit-union transactions, with sweeping claims that such deals are opaque and harmful by definition. That rhetoric goes well beyond what the regulator says. NCUA has stated that the Federal Credit Union Act expressly permits purchase-and-assumption transactions involving bank assets and liabilities; that these deals are arms-length and market-driven; and that they require approvals from NCUA, the FDIC, and other applicable regulators, along with fair-valuation analysis and safety-and-soundness review (NCUA response on credit union-bank transactions). That is not a loophole. That is a regulated transaction process.
If Congress or regulators want more disclosure around certain transactions, that is a legitimate policy conversation. But that conversation should be honest and targeted. It should not be hijacked into a false claim that every transaction proves credit unions are abusing the system. Nor should isolated cases be used as a pretext for charter-wide tax penalties that would hit tens of millions of ordinary members who had nothing to do with those deals.
The same is true of ICBA’s claims about weak oversight. NCUA maintains a risk-focused supervisory program, publishes annual supervisory priorities, provides extensive consumer-compliance resources, and issues enforcement orders when institutions or insiders violate the law or engage in unsafe or unsound practices (NCUA 2025 Supervisory Priorities; NCUA Administrative Orders). Reasonable people can debate whether supervision should be refined in specific areas. But calling the entire system “lax” is misinformation, not analysis.
What credit unions deliver every day
At DCUC, we represent credit unions rooted in a clear mission: serving those who serve our country and the communities around them. That mission is not theoretical. It shows up when military pay is threatened, when families face emergencies, when bases and defense communities need affordable financial access, and when not-for-profit institutions step forward because others do not. DCUC has repeatedly highlighted member credit unions supporting servicemembers and federal workers during shutdown-related disruptions, extending relief, liquidity, and practical help when families needed it most (DCUC, DCUC).
The numbers reinforce the point. At year-end 2025, federally insured credit unions served 144.7 million members and held $2.43 trillion in assets, while maintaining a strong 11.26 percent net-worth ratio (NCUA Quarterly Data Summary, Q4 2025). NCUA also reported 2,390 low-income-designated credit unions, meaning more than half of federally insured credit unions carry a designation tied directly to serving people and places that need affordable financial access most (same source). More than one in ten federally insured credit unions are minority depository institutions, serving more than 6.5 million members and holding more than $88 billion in assets (NCUA Minority Depository Institutions).
And the member value is measurable. NCUA’s own 2025 fourth-quarter comparison shows credit unions generally offered lower average rates than banks on major consumer lending products and higher yields on many share certificates and similar deposit products (NCUA Credit Union and Bank Rates, 2025 Q4). That is what a cooperative model is supposed to do: return value to members, not maximize returns to outside shareholders.
Join us
None of this means credit unions are beyond scrutiny. They are not, and they should not be. If there are governance failures, transaction-specific concerns, or areas where oversight can be sharpened, then sharpen it. But targeted oversight is very different from a broad political campaign built on mistruths about the entire charter.
So here is my message ahead of the ICBA Washington Summit: credit unions are not the enemy of community banking, and the communities we both serve are not helped by misinformation. We can disagree on policy without spreading falsehoods. We can advocate for our institutions without smearing the cooperative model. And ICBA can choose a better path. It can join us in defending community access to affordable financial services, in supporting servicemembers and veterans, and in building stronger local economies. It can leave the petty attacks behind and join us in the real work.
Congress and industry leaders should reject charter-wide tax penalties driven by rhetoric and instead prioritize community access, consumer value, and targeted oversight where facts justify it. The country does not need another campaign of distortion; it needs more institutions willing to serve, compete fairly, and put communities first.
Jason Stverak is Chief Advocacy Officer at the Defense Credit Union Council.