07/30/25

The Ohio Bankers League (OBL) has joined 51 other state bankers associations in a formal letter urging the U.S. Department of the Treasury to conduct a comprehensive study of the $2.37 trillion credit union industry. The joint request calls into question whether credit unions’ current practices still align with the tax-exempt status they have held since 1934.

Originally created to serve individuals of modest means, credit unions have undergone significant changes in recent years, evolving into complex financial institutions that often mirror the operations of tax-paying commercial banks. In the letter, the associations highlight concerns about the sector’s increasing scale and shifting priorities. Today, 450 credit unions hold more than $1 billion in assets, and in 2023 alone, 22 credit unions announced acquisitions of community banks representing nearly $12 billion in assets.

“Seemingly at odds with their mission and structure, these credit unions acquire commercial banks, offer nationwide membership and sponsor professional sports teams,” the associations wrote. “They even draw tax-exempt income from business entities for IT, insurance and other services. Their growth suggests that they are operating like banks without the same requirements, including federal corporate income tax obligations.”

The letter also pointed to high-profile examples such as a federal credit union purchasing naming rights to the Washington Commanders' NFL stadium, underscoring the expanding commercial footprint of some institutions in the space. OBL supports the call for a Treasury-led evaluation of whether these institutions still qualify for federal income tax exemption under their original public service mandate. The letter further recommends that the Treasury provide policy options for Congress to consider, including legislation requiring credit unions to pay federal corporate income tax and subjecting federal credit unions to unrelated business income tax (UBIT), similar to other nonprofit entities.

The full letter reflects our continued concern among state banking leaders nationwide that the credit union industry’s unchecked growth and broadening commercial activities are eroding the rationale for continued tax exemption—an issue that directly impacts both the competitive landscape and public revenues.