Preserving Credit Unions’ Tax Exemption: A Vital Benefit to Our Communities

Why Are Credit Unions Tax-Exempt?

Credit unions were established to provide financial services to everyday people—especially those who might not otherwise have access to fair and affordable banking. The tax exemption recognizes that credit unions return earnings to their members through:

✅ Better Interest Rates – Whether it’s higher rates on savings or lower rates on loans, credit unions reinvest earnings to benefit members.
✅ Lower Fees – Because credit unions don’t have to maximize profits for investors, they can offer fewer and lower fees compared to for-profit institutions.
✅ Community Investment – Credit unions support local initiatives, financial education, small businesses, and underserved populations.

This unique structure fosters financial well-being and economic growth at the community level, rather than funneling profits to Wall Street investors.

The Economic Benefit of the Credit Union Tax Exemption

The tax exemption isn’t just about keeping credit unions competitive—it delivers measurable benefits to consumers and the broader economy. Research has shown that the presence of credit unions in the marketplace leads to lower borrowing costs and better financial outcomes for all consumers, including those who bank with for-profit institutions.

According to studies by the Credit Union National Association (CUNA), the benefits credit unions provide far outweigh any potential tax revenue the government might collect if the exemption were removed. In fact, taxing credit unions could lead to:

❌ Higher Costs for Members – Without the exemption, credit unions would likely have to increase loan rates, lower deposit rates, and introduce more fees.
❌ Fewer Financial Services for Underserved Communities – Many credit unions focus on serving rural areas, small businesses, and lower-income households. Losing the tax exemption could limit their ability to provide these essential services.
❌ Less Market Competition – Credit unions help keep banks accountable by offering better rates and consumer-friendly financial products.

Why Now? Congress Needs to Hear From Us!

America’s Credit Unions is urging credit unions, members, and advocates to take action and tell lawmakers to keep the tax exemption in place. Fortunately, they’ve made it incredibly easy to make your voice heard. By visiting the Grassroots Action Center, you can send a pre-written email (or customize your own message) directly to your legislators with just a few clicks.

TAKE ACTION NOW :  Grassroots Action Center | America’s Credit Unions

Your voice matters. Whether you’re a credit union member, employee, or community supporter, protecting the tax exemption ensures that credit unions can continue serving Main Street—not Wall Street.

Let’s stand together to protect the not-for-profit, member-first mission of credit unions.