Credit Union Transparency and Accountability

ABA Position

The credit union mission of service and its not-for-profit cooperative structure have long shielded the $2.3 trillion industry from public scrutiny. ABA supports competition within the financial services marketplace, but insufficient transparency and accountability for credit unions harms both consumers and taxpayers. Regulators and members of Congress alike have concluded that the modern credit union system – and its 140 million members – would benefit from more disclosure and reporting requirements. ABA seeks to promote more regular oversight of credit unions while advocating for more appropriate regulatory, supervisory, and tax requirements that better reflect the industry's evolution.

Congress established federal credit unions more than 90 years ago to provide basic consumer financial services to those of modest means connected through some common bond. In light of their statutory mission and not-for-profit structure, Congress exempted credit unions from federal income taxes and limited their activities.

Throughout the last several decades, credit unions have changed significantly and now acquire banks, issue subordinated debt, and even offer membership nationwide with multimillion-dollar marketing campaigns. As credit union activities expand, the need for congressional oversight and regulatory review grows. Policymakers have a responsibility to ensure that the credit union industry’s special tax and regulatory treatment is justified by the community benefit it produces.

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What Others are Saying

“Credit Unions have largely escaped scrutiny by a combination of wrapping themselves in the ‘good guy’ flag as a nonprofit, mission-oriented entity and by not releasing data to the public.”

Aaron Klein, Brookings Institution (2023)

“It's starting to seem like the notion, codified in statute, that credit unions are ipso facto benevolent to our most vulnerable borrowers is in need of rethinking.”

American Banker Washington Bureau Chief John Heltman (2023)

“Our legislators have given a huge pass to credit unions, on the assumption that they’re serving and meeting the needs of their members.”

National Fair Housing Alliance President and CEO Lisa Rice (2023)

“Credit unions are not as good for consumers as the industry claims.”

Rise Economy CEO Paulina Gonzalez-Brito (2023)

“Credit unions have stretched their common-bond and membership rules so far as to be almost meaningless.”

Tax Foundation President Emeritus and Senior Policy Adviser Scott Hodge (2023)

“It is also time for state legislators to accelerate efforts to ensure certain nonbank entities have Community Reinvestment Act-like requirements, particularly in sectors where there is significant subsidies or support for their business activities.”

Consumer Financial Protection Bureau Director Rohit Chopra (2023)

“Many of these deals are about credit unions seeking to acquire commercial loan portfolios; how does that help those whose capital was used to buy those books of business?”

Frank J. Diekmann, CUToday.info (2023)

“Looser membership standards for credit unions allowed the institutions to grow significantly larger than originally envisioned, but whether that means they serve more underserved or unserved individuals or if they are better at providing services to these groups is unclear.”

Joe Bishop-Henchman and Matthew Putnam, National Taxpayers Union (2024)

“Even though the way credit unions operate bears little resemblance to how most people envision nonprofit organizations, they enjoy the same set of tax benefits from the federal government — and sometimes even better treatment.”

Tax Foundation President Emeritus and Senior Policy Adviser Scott Hodge (2024)

“There is this myth within the credit union system that because credit unions are owned by their members, they’re always going to do right by their members…the people who manage the credit union, their interest doesn’t always align with that of the members.”

National Credit Union Administration Chairman Todd Harper (2024)

Credit Union Transparency and Accountability

ABA Position

Learn more about efforts to reform credit unions

Policy Library

News

ABA Resources

Industry Resources

What Others are Saying

Credit Unions in Each State

In Depth

Our Experts

Stay Connected

Working Group on State Issues

Reform Credit Unions

Credit Union Transparency and Accountability

ABA Position

Learn more about efforts to reform credit unions

Policy Library

News

ABA Washington Summit Panel on Need for Credit Union Oversight

ABA Resources

Industry Resources

What Others are Saying

Credit Unions in Each State

In Depth

Our Experts

Stay Connected

Working Group on State Issues

Reform Credit Unions