Don’t Tax My Credit Union: Why the Proposed Tax Hurts Our Members, Our Communities, and Our Mission
At Scott Credit Union, we are proud to be part of a not-for-profit financial cooperative that puts people before profits. As a member-owned credit union, everything we do—from offering lower loan rates and competitive interest rates to investing in our communities—is built around you, our members.
But now, there’s a proposed change that threatens everything that makes credit unions like ours different. Some lawmakers are considering removing the federal tax-exempt status of credit unions, treating us like for-profit banks.
We want to be clear: Scott Credit Union stands firmly against this proposal, and here’s why.
Credit Unions Are Not Banks
On the surface, credit unions and banks may offer similar services, such as checking accounts, car loans, and savings options. But the similarities end there. The core difference lies in our structure and purpose.
- We’re Member-Owned: When you join Scott Credit Union, you become an owner. Banks exist to generate profits for shareholders. Credit unions exist to serve their members and embody the credit union philosophy of “people helping people”.
- We’re Not-for-Profit: Instead of lining the pockets of Wall Street investors, our earnings go back to you through better rates, fewer fees, and personalized service.
- We Invest in People, Not Profits: We support the communities we serve by reinvesting in financial education, youth programs, small businesses, and nonprofit partnerships. This is just one way credit unions differentiate from banks.
What’s at Stake?
The proposal to impose federal income taxes on credit unions would impact the member-focused model that makes credit unions a lifeline for millions of Americans. Here’s how this could affect you:
- Higher Loan Rates: We may be forced to raise interest rates on auto loans, home mortgages, and personal loans.
- Lower Savings Dividends: Your hard-earned money in savings could grow more slowly.
- More Fees: To cover new tax burdens, credit unions might have to add or increase fees that we currently work hard to keep low.
- Reduced Community Support: Credit unions would have fewer resources to give back, reducing our ability to support local schools, nonprofits, and financial literacy programs.
- Loss of Bonus Dividends and Loan Rebates: In 2024, $1 million was given back to members through our Bonus Dividend and Loan Interest Rebate, marking the 34th consecutive year SCU paid a bonus dividend. This long-standing tradition of giving back to members could disappear under a new tax burden.
Why Our Tax-Exempt Status Matters
Credit unions already pay state and local taxes, just like other businesses. The only exemption we receive is from federal income tax because we are not-for-profit institutions designed to return value to our members, not to generate corporate profits.
Removing this exemption would treat us like big banks, even though we operate fundamentally differently. It’s not just an unfair comparison; it’s a dangerous precedent that could harm everyday people.
Scott Credit Union’s Community Impact
Scott Credit Union makes a meaningful difference in the communities it serves by going far beyond traditional banking. Through its Acts of Kindness initiative, SCU employees have completed 207 acts in just two years by delivering meals, supporting schools, and partnering with local organizations.
Since 2020, the SCU Community Foundation has awarded $355,000 in With You Grants to fund classroom projects and educational initiatives. SCU also proudly honors its military roots by supporting veterans and military families, such as assembling gift baskets for Fisher Houses in St. Louis and Chicago and helping furnish tiny homes through Salute to Service Weekend. At SCU, giving back is a lasting commitment to building stronger communities.
A Tax on Credit Unions Is a Tax on You
If this proposal goes through, it’s not just Scott Credit Union that will feel the impact. You, your family, and your community will also be affected. This tax would reduce the financial benefits you currently enjoy and make it harder for us to do what we do best: help you reach your financial goals.
How You Can Take Action
We need your voice to protect your credit union. Here’s how you can help:
- Contact Your Lawmakers
Let them know you oppose taxing credit unions. Tell them how Scott Credit Union has helped you and your family with better rates, fewer fees, or financial education. Visit DontTaxMyCreditUnion.org to send a message to your representative. - Share Your Story
Post on social media using the hashtag #DontTaxMyCreditUnion. Let others know what’s at stake and how credit unions have made a difference in your life. - Stay Informed
We’ll continue to provide updates on this issue as it unfolds. Be sure to follow us on social media to stay in the loop.
Your Membership Matters Now More Than Ever
At Scott Credit Union, your membership is more than a number. It’s a powerful reminder that when people work together, they can create lasting, positive change. Help us protect the cooperative spirit that makes credit unions special.
Don’t Tax My Credit Union
Send a message to your U.S. Representatives and Senators now and tell them to oppose a tax on credit unions.
