As Congress considers tax reform during the 2025 session, big banks are lobbying to increase federal taxes on credit unions. If successful, 1.5 million Iowa credit union members could face higher fees, lower savings rates, and fewer financial options.
Credit unions are not-for-profit cooperatives, which is why we’re exempt from federal corporate income tax. This tax status allows us to return value to members through better rates, fewer fees, and investments in local communities. Now, that benefit is under threat.
Fast Facts:
Q: Don’t credit unions already pay taxes?
A: Yes. While we don’t pay federal income tax, credit unions pay property, payroll, sales, and the Iowa money and credits tax—which banks don’t pay.
Q: How much do credit unions contribute to taxes?
A: In 2023 alone, credit unions paid $23 billion in federal taxes and $13 billion in state and local taxes, according to America’s Credit Unions.
Q: What would happen if credit unions lost their tax-exempt status?
A: Examples from Canada and Australia show that ending this exemption could reduce personal income by $13.8 billion annually, shrink the U.S. economy by $26.6 billion, and lead to a loss of 82,000 jobs every year for the next decade.
How You Can Help
Credit unions are vital to maintaining financial choice for everyday Iowans. To keep that choice available, we need your voice! Contact your U.S. Senators and Representatives to tell them why credit unions matter to you and your community.
Together, we can protect what makes credit unions different—and better—for all.
