Bankers are relentless in their efforts to tear credit unions down. The Independent Community Bankers of America (ICBA), in a new “report”, claimed that credit unions harm communities. And the American Bankers Association’s (ABA) witness, during Senate testimony on deposit insurance, questioned credit unions’ tax status.
Bankers falsely claim that credit unions misuse their tax status by serving more people, or that they don’t do enough to serve the communities they’re in.
How can both be true? Credit unions meet their mission as not-for-profit financial cooperatives by fighting for opportunities to provide safe, affordable services to people who need them most. Further, credit unions are the most regulated financial institutions in the country.
The bankers don’t admit that the communities credit unions serve are the ones they choose to abandon. Credit unions step up in these communities to purchase banks, in free-market decisions made by the banks’ boards of directors. Banks selling to credit unions isn’t a failure of the financial marketplace, rather, it’s credit unions upholding their responsibility to serve those in need.
In ICBA’s report, their findings don’t add up.
According to data from the Small Business Administration (SBA), credit unions provide more small business loans than the banks they acquire—both before and after the sale. Within two years after a bank purchase, the credit union makes nearly double the amount of SBA loans compared to pre-sale.
ICBA fails to acknowledge that banks have spent years lobbying against credit union efforts to expand the arbitrary limits on member business lending. They oppose every bill that would give credit unions more flexibility to serve small businesses, including those owned by veterans. Then, when credit unions are legally restricted from commercial lending – banks cry foul.
Credit unions operate under a fundamentally different set of rules, including membership restrictions, usury ceilings, and capital limitations. Credit unions can’t raise funds the way banks do. Credit unions don’t impose prepayment penalties on loans. And they’re held to strict compliance regimes that disproportionately impact smaller institutions.
Yet despite these limitations, credit unions continue serve underserved communities, offer fair rates, and provide financial education and access where others won’t. When a bank sells to a credit union, it’s because they are choosing the best option to carry on their legacy of service.
When it comes to the credit union tax status, the not-for-profit structure of our industry reinforces its commitment to people. A commitment that’s reflected in not only the value credit unions provide to their 144 million members, but to all consumers.
Credit unions deliver more than $37 billion in financial benefits annually through lower interest rates on loans, fewer and lower fees, higher savings yields, and better pricing on services. The benefits far outweigh the “cost” of the tax exemption – a roughly 1,200% return.
Credit unions go above and beyond for their members. For example, Peninsula Credit Union in Washington had a consumer in search of a home equity loan. When they discovered he was carrying more debt than expected that denied his initial application, they found a solution that consolidated his debts and reduced his monthly payments by nearly $1,000.
In Colorado, ENT Credit Union has helped its members pay off over $700,000 in debt so far in 2025. With personal financial coaching, consumers improve their financial well-being and become more confident in their financial decisions after education on budgeting, credit reports, and debt repayment.
Consumers are evolving. Our financial marketplace is evolving. But banks want to keep credit unions boxed into a model that is nearly 100 years old. Credit unions deserve the opportunity and flexibility to evolve to meet their members’ needs.
America’s Credit Unions will stand by lawmakers who stood by us. We’ll support those who defended our tax exemption and fought for our ability to serve. And we’ll continue pushing for regulatory relief, including reforms to the CFPB and a rollback of burdensome reporting thresholds that hurt small credit unions.
Credit unions aren’t the problem. They’re part of the solution. If we want to see more lending, more access, and more competition, then Washington should stop tying our hands and start letting us lead.
We’re not afraid of the data. We’re not afraid of the debate. But we are tired of being blamed for outcomes shaped by policies we’ve long fought to change.
Jim Nussle is President/CEO of America’s Credit Unions.
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