WASHINGTON—Credit union trade groups are turning their attention to the next stage of negotiations as the House and Senate work to reconcile their budget bills—both of which currently leave the longstanding credit union tax exemption untouched.
But with key differences still unresolved and Senate Majority Leader John Thune (R-SD) facing hurdles to secure final votes, observers doubt Congress will meet its July 4 deadline. Meanwhile, America’s Credit Unions and the Defense Credit Union Council remain on alert for any last-minute deals that could put the exemption back on the table.
The Defense Credit Union Council Tuesday sent a letter to House Speaker Mike Johnson (R-LA) and House Minority Leader Hakeem Jeffries (D-NY) urging them to preserve the tax-exempt status of credit unions.
“Taxing credit unions would be a direct hit on the financial readiness of our nation’s military,” said DCUC President and CEO Anthony Hernandez in the letter. “Credit unions operate on bases, offer specialized support, and stand in where for-profit banks will not. Congress has long recognized this essential role, and we urge the House to uphold that legacy.”
“From day one, DCUC has been vigilant in defending the credit union tax exemption,” added Jason Stverak, DCUC’s chief advocacy officer. “We’ve submitted over 30 letters to Congressional leaders this year alone, and we will continue to fight to ensure that the communities we serve are not harmed by misguided policy shifts.”
DCUC’s latest letter emphasizes that removing the exemption would raise costs for millions of credit union members, reduce services in military communities, and undermine financial access for those who serve our country.
America’s Credit Unions President and CEO Jim Nussle, during a call with the media Tuesday, emphasized the trade group’s strategy to protect the CU tax break has been successful.
“This bill from the very beginning, and because of expiring provisions, was perilous for credit unions,” said Nussle. “At every step in the process we were able to engage credit union leaders, employees and members to help support the credit union tax status.”
Nussle reminded the next step in the process is for the House to consider the Senate version or provide a version back to the Senate.
“And we will see that process play out, possibly even in the next 24-48 hours before the 4th of July, depending on whether or not they have the votes in the House to proceed,” Nussle said. “There's obviously a number of provisions other than the tax status itself for credit unions that we have been engaged in and that we have both been monitoring as well as been back channeling to staff and committee members.”
DCUC, too, said it is dedicated to watching developments on the budget bill closely, especially as one of the biggest concerns during the entire budget bill process remains: late night/early morning deals struck between a few members of Congress looking for additional dollars.
“This is a concern the Defense Credit Union Council has always held since we began focusing on this threat a year ago,” said Stverak. “And this threat remains—despite the House and Senate each passing their versions of the budget bill. We will remain vigilant to ensure the credit union tax status is protected and preserved when the final bill reaches the President’s desk.”
Washington credit union advocate John McKechnie shared his perspective on the CU tax fight.
"Credit unions, overwhelmingly, are expressing a sense of a job well done—our industry put a great deal of time and effort into making sure that Congress understands why the tax exempt status is justified," he said. "I’d like to let the ink dry on the bill and let our members enjoy Independence Day. And then it will be time to go back to work, because there is still work to be done to undo some of the misconceptions put forth by the bank lobby during this debate, especially concerning large credit unions not meriting the exemption, and how bank purchases somehow trigger a tax discussion."