DCUC Defends Credit Union Tax Status, Debunks Misinformation from Bankers in Letter to Committee Leaders

Jason Stverak

​Today, the Defense Credit Union Council (DCUC) sent a letter to the House Financial Services Committee and the Senate Banking, Housing, and Urban Affairs Committee, urging support for credit unions' tax-exempt status while addressing ongoing misinformation from the banking industry.

DCUC’s letter highlights the critical role credit unions play in serving their 40 million members, including military service members, veterans, and their families. Since the 1930s, credit unions have maintained a tax-exempt status, reflecting their not-for-profit, member-owned structure. This status enables credit unions to reinvest earnings into their communities by offering lower loan rates, higher savings returns, and reduced fees.
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DCUC Chief Advocacy Officer Jason Stverak outlined the many contributions defense credit unions offer to America’s communities and economies, including:

• Affordable financial products: Low-cost loans, VA mortgages, and credit-building opportunities tailored to military families.
• Financial education: Programs that enhance budgeting, saving, and wealth-building skills for service members and their families.
• Support for underserved areas: Banking services that improve economic outcomes in rural and underbanked communities.

Stverak emphasized that taxing credit unions would reduce their ability to serve these communities. DCUC’s letter also noted how banks, which operate for profit, enjoy significant tax advantages, such as the Subchapter S exemption, benefiting nearly one-third of banks.

“If credit unions were taxed as banks are, the impact on the military community and underserved populations would be devastating. Taxing credit unions would force them to raise fees, reduce lending, and scale back the programs that provide critical support to service members and their families—many of whom already face unique financial challenges due to frequent relocations and deployments,” said Stverak. “Defense credit unions represent a powerful example of the good that can come from policies that encourage financial inclusion.

Their tax-exempt status isn’t a loophole or subsidy; it’s a recognition of their unique role in serving the public good.”
 
In addition to its letter, DCUC provided the Committees’ leaders with FAQs and additional references backing its position and response to banking counterparts’ repeated criticism of the credit union mission.
 
DCUC will continue to emphasize the essential role credit unions play in financial inclusion and urge Congressional leaders to recognize their contributions to the public good.

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