Hear Us ROAR!

There is something in the air in credit union land. There is this feeling like it might rain but there is also a chance that the sun will come out. You know the days I am referring to — the days where you carry your umbrella all day but not a drop of rain falls? It’s frustrating. You didn’t have room for an umbrella, but you took it with you that morning, just in case. Some even joke that they bring an umbrella so it won’t rain.

As most of you know, credit unions, in Michigan and around the country, are not-for-profit cooperative financial institutions. They reinvest their earnings back to their member-owners in the form of lower rates, fees, financial education programs and commitment to the community. Currently, while credit unions do pay a lot in taxes such as payroll taxes, real estate taxes and property taxes, they’re able to retain their earnings and not pay a tax on net income (federal income tax). The majority of credit unions have a voluntary board of directors and all live by the mantra of “people helping people.” They began as financial cooperatives in basements of churches, schools, farming communities or in factories when people had to come together in a cooperative way because banks refused to lend them money. While credit unions have grown and evolved since then, their cooperative structure and core mission remains the same, regardless of their size.

The umbrella is an interesting metaphor for the current advocacy environment we are navigating given this old but very tried and true image that represents the credit union movement from the 1920s. Credit unions, then and now, were consumers’ protection from the hardships of life and financial distress. They were and remain the umbrella.

Perhaps in addition to “hard times, sickness, financial distress” coming down on the credit union umbrella, we can also add “bankers” as we know that the current state of our status is at risk because of their antics. It is their rhetoric in the ears of Congress that’s stirring up this storm, again. They bring up red herrings, such as bank asset acquisitions, asset size and large-dollar marketing efforts to try and lure Congress to remove the tax exemption. All the while, the structure of credit unions remains the same. What credit unions use those exempt dollars for does not change even if a credit union does purchase bank assets or advertises on a stadium.

In our recent visit to Washington, D.C., the Michigan Credit Union League and credit union employees and volunteers (175 people strong) “Hiked the Hill” and met with our 13 Members of the U.S. House and our two U.S. Senators (or their staff) all of whom reported back to us that they support credit unions and are “with us.” All but one indicated that there is no talk about revoking the exemption and they would be surprised if it even made its way into a bill. There were similar reports of Capitol Hill visits from other leagues around the country. There was one U.S. Representative in Michigan who said there are discussions about taxing the very largest of credit unions. The saying “size doesn’t matter” rings true here – we oppose taxing any credit union, large or small. Since our return from D.C., the rhetoric and noise (i.e. the signs of a storm) have gotten even more ominous. Given our current landscape, we definitely felt a few raindrops, but is it enough to need an umbrella? I say, pull the umbrellas out of your briefcase and get ready for the rain.

What does this current storm mean to our members? It means money out of their pocket.

Credit unions will have less to commit to their community. Instead of reinvesting all of their profit back into member-facing and community initiatives like grants, scholarships, free checking, financial counseling, lower rates and less fees, they will have to pay tax on it. It will take money allocated to support their member-owners and send it to Washington. For our credit unions, their financial model will be altered in a way that is contrary to the entire reason they were created in the first place, to be in the best position to serve members! Don’t get me wrong, credit unions will survive, but they will have less to devote to their members and communities. Less to support you, when given the current economic uncertainties, you need credit unions now more than ever.

While I hope that I am educating some credit union members and future credit union members about the potential storm we’re in, I really hope that this article is catching the eye of someone who was elected to serve in Congress or their staff. Are you aware that 60% of the Michigan population are credit union members? Are you aware that Michigan credit unions employ over 19,000 people? Are you aware that credit unions around the country opened nearly 1,400 branches while banks closed some 19,000 branches over the last 10 years? Do you know that, in 2024, Michigan’s not-for-profit, member-owned credit unions delivered over $1 billion in benefits to members and non-members? Did you know that Michigan credit unions provided financial well-being programs that touched over 19,000 high school students and gave more than 17,000 financial education books to Michigan children?

So, with all this talk about umbrellas and rain, why is this article titled “Hear Us ROAR”? Well, if you’ve been to a Lions game, you know how loud us Michiganders can be. With 60% of us being credit union members, and close to 40% of the rest of the country also belonging to a credit union, it’s about to get really loud in Washington if Congress takes steps to alter credit unions’ not-for-profit model. Credit union members: pack your umbrellas and reach out to your congressional representatives. And to our Michigan delegation, to say that you are “with us” means to implore your friends in Congress, especially those serving on the Ways and Means Committee, to uphold our current not-for-profit tax status. Being “with us” means rejecting any proposed legislation that would eliminate this for any credit union. Period.

We are watching for the storm and are encouraging 6 million Michigan members to do the same. 

Below are some ways you can immediately take action:

• Use the Grassroots Activation Center – America’s Credit Unions has a pre-written message ready to send directly to your lawmakers. It takes less than two minutes. Do it.
• Activate your staff and members – Encourage them to speak up and share how credit unions have made a difference in their lives.
• Sign up for the Member Activation Program (MAP) – Get access to easy-to-use email templates, op-eds, and other tools to help spread awareness.
• Run Project Zip Code – Show lawmakers exactly how many of their constituents are credit union members. This data is powerful when it comes to policymaking.
• Share DontTaxMyCreditUnion.org – Make sure your members and community understand what’s at stake.

Thank you for your support.

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