Senate Banking Committee Ranking Member Sherrod Brown

“I am disturbed that ten years after the financial crisis, the NCUA is once again delaying important rules to increase capital at large credit unions… I commend Board Member Harper for opposing this unnecessary extension and demanding that NCUA focus on strengthening supervision and identifying risks to credit unions.”

Former Senate Finance Committee Chairman Orrin Hatch

“I am concerned that the credit union industry is evolving in ways that take many credit unions further from their original tax-exempt purposes. Recent actions by the National Credit Union Administration (NCUA) have further relaxed field of membership constraints, opened the door to the use of alternative capital, and lifted limits on other activity, such as business lending, which has traditionally been less associated with the mission of tax-exempt credit unions. While there may be worthwhile pursuits, they should give us pause and cause a reflection on the core mission of credit unions and their tax-exempt purpose.”

Senate Minority Leader Charles Schumer

“Recent reports have revealed deeply troubling conduct by credit unions and other financial institutions that engage in taxi medallion lending… As the independent federal agency that charters, regulates, and insures federal credit unions and protects the members who own them, NCUA has a responsibility to understand what additional guidance should be provided to its examiners to address the types of risks posed by taxi medallion lending.

Stephen Moore

Tax reform advocate and adviser for the Tax Cuts and Jobs Act of 2017

“We tried to get rid of that loophole [the credit union tax exemption] in the tax bill and we just ran into a buzz saw….  They have a powerful lobby that protects that tax loophole, we made a run at it, but couldn’t cut through it.”

Karen Shaw Petrou

Credit-union regulation is often premised on profit maximization, not mission compliance. . . .  Charter arbitrage at credit unions is powered not only by unique federal benefits, but also by regulatory arbitrage – i.e., less stringent safety-and-soundness regulations.  Although Congress has stipulated that federal credit unions must operate under capital rules comparable to those governing banks, this has not been implemented. About half of all credit unions are allowed to use “secondary” capital instruments generally barred for banks. Credit unions that issue this capital fail at a rate that is 362 percent greater than conservative institutions. Proposals to expand the use of these instruments thus may increase overall solvency risk in the credit-union sector, exposing members and the broader economy to risk.”

Aaron Klein

“But if your word is your bond, does everyone who speaks share a common bond? In that case, the concept of a common bond is meaningless. That is the direction that the nation’s credit union movement, including its federal regulator, appears to be moving — and that’s something the public and policymakers need to stop and think about.”

Erica York

“Given the change in the financial sector over the last several decades, it would be useful for lawmakers to reexamine the extent to which credit unions currently fulfill their original purpose. If they have strayed from their intended function and now resemble other taxed financial institutions, their exemption would represent a disparity across similar economic activities.”

Josh Daniels

Op-Ed in Deseret News

“If Congress wants to make the tax system fairer, lawmakers should focus on unfair tax advantages and loopholes received by certain businesses and industries. To see the most blatant example of one special interest receiving preferential treatment through the tax code, lawmakers need look no further than the ridiculous charity status that allows big credit unions to make millions of dollars without paying a dime in taxes.”

Diana Furchtgott-Roth

Op-Ed in US News & World Report

“Credit unions were originally given tax-exempt status so that they would service lower-income individuals, because banks were not doing so. The situation has now changed, and the tax law should change with it. As Congress proceeds with tax reform, members should consider uprooting this outdated exemption and no longer picking winners and losers. Taxpayers should not have to subsidize a credit union’s name on a stadium, or people’s purchases of aircraft and boats.”

Lynne Breyer

Arizona Freedom Alliance Op-Ed in the Sonoran News

“There is no reason why these humongous credit unions, with their millionaire CEOs and billions of dollars in holdings, should be treated the same as a small soup kitchen, after-school program or animal rescue organization in the eyes of the IRS. If Congress is committed to making fairer, lawmakers should start by making large credit unions pay their fair share in taxes, while lowering tax rates for businesses that have been contributing to government coffers year after year.”

Scott Hodge

Op-Ed in Real Clear Markets

“It appears from the way credit unions are marketing themselves that they no longer feel bound by the field of membership restriction, or believe they can stretch the rules to include entire communities or, seemingly, the public at large. As evidence, you don’t have to look any further than the dozens of credit unions that have stepped up to buy the naming rights to sports stadiums and arenas over the past few years. Credit unions were becoming anachronisms before the enactment of the TCJA, but that status should be declared official now that the tax gap between banks and credit unions has effectively been closed. If they are going to act like banks and subsidize sports stadiums like banks, it is time that they paid taxes like banks.”

Rob Taylor

Op-Ed in Credit Union Journal

“I have colleagues from other small credit unions who share my frustrations. The problem with our movement is most of us have been indoctrinated to believe our common enemy are bankers – with their constant thump of the taxation war drums – when in fact the real threat to our future lies within our own industry. If taxation is in our future, then let it be with the large bank-like credit unions so the entire movement doesn’t suffer from the actions of a few.”

Scott Pullins

Ohio Taxpayer Association Op-Ed in the Columbus Dispatch

“There may be justification for allowing small credit unions who provide banking options for small employers and underserved communities to operate tax-free. But it’s totally unreasonable for credit unions that operate dozens of branches and serve tens of thousands of customers to expect to the same treatment from the IRS as a local soup kitchen or animal shelter. Members of Congress should stop being wooed by the checks they receive from big credit unions and wake up to the fact that the industry doesn’t deserve a free ride. If struggling American families have to pay their taxes, the biggest and richest credit unions should have to, as well.”

Yael Ossowski

Op-Ed in The Charlotte Observer

“With handsomely paid CEOs and hundreds of millions of dollars in assets, we must stop pretending enormous credit unions are charities in need of preferential treatment from Washington. If President Trump and members of Congress want to signal fairness in the new tax code, they should start by eliminating the unfair and indefensible corporate welfare big credit unions receive as a result of their non-profit status. That would go a long way to match rhetoric with reality.”

Brandon Arnold

“So should exploration of historical tax policies that might be modified for changing times. To highlight one of many cases, Congress could review the tax exemption currently provided to all credit unions, bearing in mind there are now 281 credit unions that hold over $1 billion in assets or more and increasingly are competing in a head-to-head manner with traditional banks. Congress should examine whether this exemption should be phased down or capped, while at the same time helping to create a more navigable regulatory on-ramp that would make it easier for such entities to charter themselves as banks.”

Robert Brett

Concerned citizen letter to the Times Chronicle

“Sadly, small banks are threatened by the growth of large credit unions who have spent the decades enjoying special exemptions that allow them to avoid federal corporate income taxes. Credit unions used to limit their membership to specific demographics, but today, large credit unions will accept practically anyone, placing them in direct competition with small banks. Because small community banks must pay taxes, they are ill-equipped to compete. Additionally, credit unions have started to engage in financial functions like commercial lending, which had previously been outside their purview. More than one in five U.S. banks have disappeared since 2010, while big credit unions are getting a leg up over their competition. If it looks like a bank and functions like a bank, it should be taxed like a bank.”