How credit union tax reform impacts everyday Americans.
For over 100 years, credit unions have been more than financial institutions; they've been lifelines for working families, small businesses, and communities left behind by traditional banks.
With over millions of members nationwide, credit unions operate differently from banks, focusing on providing value to their members rather than generating profits for shareholders.
However, ongoing discussions about taxing credit unions threaten these unique, member-first institutions and the benefits they provide. Understanding why credit union tax reform matters and learning how you can support organizations, like Clearview, is essential to protecting their ability to serve the public effectively.
What makes credit unions unique?
So why do people choose credit unions? Unlike traditional banks, credit unions are member-owned not-for-profit organizations. This structure allows us to prioritize members' financial well-being rather than maximizing shareholder profits. Credit unions typically offer lower fees, better interest rates, and more personalized service, making us an essential resource for individuals of all income levels, especially those in underserved communities.
Tax exemptions help us maintain our unique structure and mission. By not operating as for-profit entities, we reinvest our earnings into services and benefits for members rather than paying out dividends to shareholders. Putting community over profit allows us to drive financial inclusion, support local businesses, and provide much-needed aid in times of economic uncertainty.
It’s important to understand that credit unions do pay taxes—Clearview pays state and local taxes annually. The exemption from federal income tax was intentionally granted by Congress to support credit unions’ ability to serve individuals and communities who might otherwise be left behind. The earnings we generate are reinvested directly into our members through competitive rates and greater access to resources.
Just check out how we were able to positively impact our members and communities in 2024 alone!
The potential impact of taxing credit unions
Taxing credit unions could have significant consequences on our ability to serve members and communities. If taxed like banks, credit unions would face:
- Increased operational costs, which could lead to higher fees and reduced financial benefits for their members.
- Diminished programs that support financial literacy initiatives, leaving communities without critical education and resources needed for long-term financial stability.
- Reduced availability of affordable loan programs, limiting opportunities for individuals to achieve personal financial security and stability.
How you can support credit unions
Advocating for credit unions is an important way to protect the services we offer to millions of Americans. Here are some steps you can take to make a difference:
- Stay informed: Learn more about how credit unions operate and the advantages they bring to individuals and communities.
- Spread the word: Share information about the potential impact of taxing credit unions on social media, within your networks, or through local community events.
- Engage with lawmakers: Contact your representatives to express your support for credit unions and encourage them to protect their tax-exempt status.
- Join a credit union: If you’re not already a member, consider joining a credit union to experience firsthand their commitment to their members and communities.
Credit unions are more than just financial institutions — they’re pillars of community support and champions of financial equity. Preserving their tax-exempt status is essential to ensuring that they can continue their mission of putting people before profits.
By understanding the impact of credit union tax reform and taking action, you can help protect an institution that benefits millions of Americans. Together, we can secure a future where credit unions remain accessible, sustainable, and a trusted resource for all.