Jump to Content
ABA: The American Bankers Association

Credit Union Competition

ABA Position

The credit union tax exemption is no longer justified. Credit unions have drifted from their original mission, and have outgrown their special tax-exempt status. Taxpayers can no longer afford to continue subsidizing the credit union industry. The goal is to have these large, aggressive credit unions return to their original mission or become subject to the same regulatory, supervisory and tax requirements as banks.

Congress established credit unions in the 1930s to provide small-dollar loans to close-knit groups of people of modest means. To encourage credit unions in their mission, Congress exempted credit unions from federal income taxes.

However, many of today’s credit unions bear little resemblance to the industry that received this special tax exemption and today have become indistinguishable from the banking industry. Credit unions have leveraged their taxpayer subsidy to aggressively grow—becoming a $1 trillion industry. And as the credit union industry expands, it does so at the expense of all taxpayers.

Show MoreShow Less

Learn more about the reality of Credit Unions

Help ABA educate the public about the realities of today’s credit union industry and how large credit unions are failing to meet the mission congress intended when the industry was created almost 100 years ago.

Visit ExploreCreditUnions.com

Our Experts

Ken Clayton

Kenneth J. Clayton

EVP, Leg Affairs/Chief Counsel, Office of Legislative Affairs & Chief Counsel

Contact Kenneth

Press Contact

Jeff Sigmund

(202) 663-5439

Contact Jeff

Stay Connected

Credit Union Committee

Guides ABA's response to the serious competitive inequities between credit unions and community banks, and makes policy recommendations to policy-making bodies.

Working Group on State Issues

Serve as a central conduit for information on emerging state legislative proposals that could impact the banking industry.