Cost to Taxpayers

Credit unions’ federal tax exemption costs the U.S. more than $3.1 billion per year. Without reporting requirements holding them accountable to their mission, it remains unclear what exactly taxpayers get in return.  

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Expert Views

Josh Daniels, Libertas Institute
“If Congress wants to make the tax system fairer, lawmakers should focus on unfair tax advantages and loopholes received by certain businesses and industries. To see the most blatant example of one special interest receiving preferential treatment through the tax code, look no further than the ridiculous charity status that allows big credit unions to make millions of dollars without paying a dime in taxes.”
— Deseret News, 2017
Diana Furchtgott-Roth, Manhattan Institute
“Credit unions were originally given tax-exempt status so that they would service lower-income individuals. The situation has now changed, and the tax law should change with it. As Congress proceeds with tax reform, members should consider uprooting this outdated exemption and no longer picking winners and losers. Taxpayers should not have to subsidize a credit union’s name on a stadium, or people’s purchases of aircraft and boats.”
— U.S. News, 2017
Brandon Arnold, National Taxpayers Union
“Congress could review the tax exemption currently provided to all credit unions, bearing in mind there are now 281 credit unions that hold over $1 billion in assets or more. Congress should examine whether this exemption should be phased down or capped, while at the same time helping to create a more navigable regulatory on-ramp that would make it easier for such entities to charter themselves as banks.”
— National Taxpayers Union, 2017
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Large Credit Unions’ Abuse of Their Tax Exemption

Recent News and Insights


The National Taxpayers Union – in a new letter to Senate Finance Committee Chairman Ron Wyden and Ranking Member Mike Crapo outlining the organization’s 2021 tax policy priorities – laid out yet another compelling argument for why lawmakers need to take a hard look at how large credit unions continue to game the nation’s tax system.


It seems like a constant hypocritical refrain from credit unions as they seek to move beyond their mission and purpose: We cannot pay federal taxes because we are not banks … And yet, we demand to be allowed to be banks in everything but name when it comes to business lending and beyond.


KDRV-TV reports that the city of Medford, Ore. says that Rogue Credit Union has accepted a $2.145 million offer for naming rights on a sports and events center, which will be dubbed the “Rogue Credit Union Community Complex” when it opens in 2023. – KDRV News,


In the wake of the recent Tax Foundation analysis of how the credit union federal income tax exemption continues to be an unfair and unwise policy another taxpayer watchdog, the National Taxpayers Union this week released a major new report highlighting the massive hit to federal coffers caused by large credit unions not paying their fair share in taxes.

See the impact on taxes in your state.

Tell Congress it’s time to reform credit unions.