By Ray Birch
WASHINGTON—While the outcome of the credit union tax fight remains uncertain, it won’t be long before the odds of preserving the tax exemption come into sharper focus, according to one Washington expert.
Jason Stverak
As the House begins its work in earnest on the budget bill, Jason Stverak, Defense Credit Union Council chief advocacy officer, noted that Congress’ tax-writing efforts are “rounding the last corner” with committees finishing their work this week and the House set to officially begin its tax writing part of the of the reconciliation process next week.
“But things are happening,” Stverak said Monday during a call with the media.
America’s Credit Unions President and CEO Jim Nussle said that in anticipation of a tax markup beginning next week the trade association is continuing its multi-faceted efforts to preserve the CU tax status.
“We're meeting with credit unions this week as well as with members of Congress,” Nussle said during a call with the media. “We are also continuing to rely on our strategy, which we deployed back in January. Our paid advertising, which in addition to our grassroots efforts, has now generated over 73 million impressions, as well as about 632,000 direct contacts messages to members of Congress. We are meeting with our advocacy partners today and ongoing this week as we continue to focus our attention on this very important issue.”
CU Tax Exemption Still Listed As Possible ‘Pay-For’
In addition to its ongoing efforts, that include a new digital ad campaign, DCUC Monday sent several letters to Congress in support of protecting the movement’s tax exemption.
“Obviously, we've not seen text of a bill,” reminded Stverak. “But the mere fact that the credit union tax exemption is still being discussed by House committee chairs, and that our tax break is still on that 55-page paper of ‘pay-fors’ that was circulated among House GOP members early this year, I’m not going to bet on the outcome. But I do feel good about what will be decided. However, until the possibility of credit unions getting taxed is dead and buried, DCUC is going to make sure we're doing everything we can on behalf of our members and all credit unions to preserve the credit union tax exemption.
“We are not taking our foot off the gas pedal now, especially since we are well aware that it is one thousand times more difficult to take something out of any legislation than it is to prevent it from going in,” Stverak added.
In a previous CUToday.info report, Nussle emphasized the trade group’s primary strategy has been to keep credit unions out of the tax bill, but noted ACU has contingency plans should the trade association need to shift its focus to getting CUs out of the tax bill.
Jim Nussle
Nussle Monday said he is cautiously optimistic about credit unions coming out of this fight—which is being fought aggressively by the bankers—with their tax break intact.
“There's cause to be optimistic, given the fact we have the stories and the outcomes on our side backed up with data,” Nussle said. “…Again, I am cautiously optimistic based on what our strategy has been since the election and even before that point. And we're not letting up.”
Speaker of the House Mike Johnson (R-LA) spoke on Fox News Monday outlining what’s ahead for the budget bill.
“The good news over the last week is that seven of our 11 committees got their pieces of the ‘Big Beautiful Bill’ done, so, we have four committees yet to go,” Johnson stated. “And then we push it back through the budget committee, merge it all together and send it to the Senate. I put it on a very aggressive timetable because we have got to get this done for the people as soon as possible. That will send stability out there to the markets…This will be jet fuel to the economy…Failure is not an option and we'll get it done.”
What’s Ahead After 2025?
If credit unions manage to preserve their tax-exempt status this year, will the movement face similar threats in years ahead?
That question is not easily answered, stated Nussle and Stverak.
Nussle said he believes credit unions’ tax exemption profile has been raised this year due to budget issues.
“It has less to do with credit unions, and less to do with the tax status of credit unions, and more to do with the budget challenges and the new President coming in with a new Congress, trying to accomplish one of his important pillars—which is the extension of the 2017 tax cuts,” said Nussle, who assured ACU will continue to work diligently to protect the movement’s tax break in the coming years, no matter the intensity of the challenge.
Stverak said that while the threat to credit unions’ tax exemption has heightened this year, with key GOP leaders recently stating the movement’s tax break is still on the table, the entire credit union industry’s work this year sends a strong message that will be remembered.
“It is my hope that as members of Congress, and the banking industry, see the incredibly strong and unified credit union opposition to this threat this year, they don’t forget that in the future,” Stverak said.