Ascentra Helps Iowa Credit Unions Maintain Federal Tax Status

Credit unions exist to serve their members, not shareholders. That’s what makes them different from big banks and why a recent proposal to change their federal tax status could have had serious consequences. Large banks pushed for credit unions to be taxed like traditional banks, which would have meant higher fees, reduced services and fewer member benefits.  Although banks and credit unions offer similar products and services, our ownership structure is widely different.  Banks are owned by a small number of shareholders and return profits in the form of stock dividends.  Credit Unions are owned by their members and return profits in the form of lower rates on loans, lower fees, and higher rates on certificates of deposit.  Our exempt federal tax status allows credit unions to give back to our members, our staff, and our communities we serve. 

But credit unions and their members weren’t going to let that happen quietly. Across the country, credit unions launched the “Don’t Tax My Credit Union” movement, a powerful awareness campaign to defend their current federal tax status against the big banks’ push to reform it. Newsletters, social media and local events encouraged members to speak up and contact their local lawmakers. The message was clear: “Credit unions are not big banks. We’re community-focused, member-owned institutions.”

Thanks to this campaign, the proposed tax change did not make it into the “One Big Beautiful Bill”, a sweeping piece of legislation that could have hidden the threat among unrelated provisions. Lawmakers heard from members directly and understood that credit unions play a vital role in helping local communities thrive.

In Iowa, over 7,000 messages were sent by members and employees of the 66 credit unions across the state.  Ascentra’s “Your Voice Needs to be Heard” campaign inspired our members to submit 4,430 postcards to our local legislatures.

“With a goal of 1,000 postcards, Ascentra members and staff far exceeded that goal” said Matt De Bisschop, Senior Vice President of Human Resources and Government Affairs, Ascentra Credit Union. “It shows how important our mission, products and services are to Iowa’s 1.5 million credit union members.”

This victory shows the power of informed, engaged members. By taking action, members protected credit unions who are putting their members’   financial well-being first For now, credit unions remain tax-exempt, able to continue offering low-interest loans, high savings rates and community support. We thank Ascentra’s members for your support and your voices earlier this year, however big banks will continue to put pressure on the credit union federal tax status, and we may experience another call to action yet this year. 

At the end of the day, this isn’t just about taxes; it’s about keeping the cooperative banking model alive. Credit unions succeed because of members, and when members speak up, they make a real difference.  Thank you for your membership!