Defense Credit Union Council (DCUC) urges Congress to preserve credit union tax exemption
WASHINGTON, DC (July 12, 2024) — As Congress contemplates expiring provisions from the Tax Cuts and Jobs Act (TCJA), the Defense Credit Union Council, DCUC, is once again defending the industry’s tax exemption. This morning, DCUC sent letters to the House Ways and Means Committee, Senate Finance Committee, and both the House and Senate Armed Services Committees urging for the preservation of the credit union tax exemption.
“DCUC strongly opposes any move to tax credit unions. Credit union tax exemption is a vital recognition of the unique role these not-for-profit financial cooperatives have as compared to other financial institutions such as traditional, for-profit, banks,” said Anthony Hernandez, DCUC President/CEO.
As affirmed by the NCUA and a 1979 IRS document (attached), credit unions under IRC 501(c)(14) are distinct entities, fulfilling their original purpose with a common bond among members and a commitment to serving low- and moderate-income individuals.
Congress has long recognized this distinction, noting in the Credit Union Membership Access Act of 1998 that credit unions, unlike banks, are member-owned, not-for-profit organizations dedicated to meeting the financial needs of consumers, particularly those of modest means.
“Taxing credit unions would undermine their mission and greatly hinder their ability to serve military and veteran communities, particularly in places where traditional banks have previously withdrawn,” said Hernandez. “Upholding the current credit tax exemption is essential to preserving service member access to financial services for our troops.”
“We thank Congress for its long history of recognizing the differences between banks and credit unions, particularly defense credit unions who serve our military and veteran communities,” said Hernandez.
For questions or comments, please contact Jason Stverak, DCUC Chief Advocacy Officer (CAO) at jstverak@dcuc.org. To learn more about DCUC’s advocacy, visit dcuc.org/advocacy.
About Defense Credit Union Council (DCUC)
The Defense Credit Union Council is the trusted resource for credit unions on all military and veteran matters. By maintaining a close and constant liaison with the Pentagon, Capitol Hill, and NCUA, the Council champions the interests of credit unions serving our military and veteran communities by coordinating policy, procedures, and legislation impacting morale and welfare, financial readiness, and the delivery of quality financial products and services. Organized in 1963, the Council’s membership is comprised of more than 180 credit unions with over 37 million members. If you would like more information about this topic, please contact DCUC at hlaverty@dcuc.org.
