The House voted 227 to 205 this week to pass H.R. 1, the landmark tax reform bill that would be the first major overhaul of the tax code in more than three decades. Passage ensures credit unions’ tax status will remain unchanged.
While many other credits, deductions and tax expenditures would be eliminated or scaled back by H.R 1, the legislation makes no change to the federal tax exemption for state and federally chartered credit unions. We attribute the preservation of the credit union tax status to an understanding on the part of tax writers that credit unions continue to fulfill their statutory mission to promote thrift and provide access to credit for provident purposes through a cooperative, not-for-profit, structure.
In 2016, credit unions provided total member benefits equal to $10.2 billion. In addition, bank – customers saved about $4 billion in 2016 from more favorable pricing due to the presence of credit unions in their local markets. This bill is indeed an affirmation of the good work and positive impact that credit unions make in the communities they serve.