Unwarranted Advantage

Large credit unions use their unjustified tax advantage to fuel bank-buying sprees that take tax-paying businesses off tax rolls at community expense, and expand into new higher-income markets to drive more deposits, higher profits, and customer growth. With 404 credit unions each holding more than $1 billion in assets and approaching 500 is it fair for these large credit unions to be beneficiaries? 

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Expert Views

Karen Shaw Petrou, Federal Financial Analytics, Inc.
“Credit-union regulation is often premised on profit maximization, not mission compliance....”  
— Federal Financial Analytics, Inc, 2019
Rob Taylor, Idaho State University Credit Union
“I have colleagues from other small credit unions who share my frustrations. The problem with our movement is most of us have been indoctrinated to believe our common enemy are bankers when in fact the real threat to our future lies within our own industry. If taxation is in our future, then let it be with the large bank-like credit unions, so the entire movement doesn’t suffer from the actions of a few.” 
— Credit Union Journal, 2021

Recent News and Insights


According to the Tax Foundation, one of the nation’s leading independent voices on tax policy, the federal income tax exemption for credit unions is inefficient, narrowly beneficial to one subset of the financial services industry, and an unfair competitive advantage that “…could be reformed, and the resulting revenue used to further improve the corporate tax base or pay for new spending.”


Large credit unions remind one of the classic video game Pac-Man, moving quickly and eating up as many banks as possible as their regulator remains as ethereal as the bad ghosts chasing dear old Pac. Unfortunately, the only people with a stack of quarters to keep the game going are American taxpayers as more and more banks leave the federal tax roll when they are subsumed by large, tax-exempt credit unions.

See the impact on taxes in your state.

Tell Congress it’s time to reform credit unions.