04/29/26
Sign The Petition: Support OBL’s Pushback Against Credit Unions
Ohio’s banks serve families, small businesses, farmers, nonprofits, and local governments in every corner of the state. They do so while paying state and federal taxes that directly support the communities they serve.
Credit unions date back to the mid-19th century in Europe and made their way to the U.S in the early 1900s. During the Great Depression, credit unions were officially authorized in federal law to serve a defined, limited purpose within the financial system. Today, many have expanded far beyond that mission and operate as full-service financial institutions while retaining structural advantages that create a persistent and growing imbalance in the marketplace.
Tax Treatment and Competitive Equity
Credit unions are generally exempt from federal income tax and the Ohio Financial Institutions Tax (FIT). This preferential treatment allows them to retain more earnings and deploy that capital to expand, compete aggressively on pricing, and pursue growth strategies unavailable to tax-paying institutions. This disparity is not the result of operational efficiency; it is the result of policy distorting the market.
Public Deposits and Accountability
Ohio law has long recognized the importance of safeguarding taxpayer dollars by placing clear requirements on where public funds may be held. As discussions emerge about expanding credit union access to public deposits, policymakers should carefully consider whether institutions that do not contribute to the tax base should be entrusted with taxpayer funds. Public dollars should be managed by institutions that are fully integrated into, and supportive of, the tax system.
Acquisition of Tax-Paying Banks
A growing national trend involves tax-exempt credit unions acquiring tax-paying banks. Each transaction removes a tax-paying entity from the rolls, reducing long-term public revenue and further distorting the competitive landscape. These acquisitions are often enabled by the capital advantages created through tax exemption.
Ohio benefits from a diverse and competitive financial services marketplace. That competition, however, must be grounded in consistent rules and shared responsibilities.
Policymakers have an opportunity to reaffirm those principles by ensuring that similarly situated institutions compete on equal footing and that public policy does not create permanent, structural advantages for one segment of the industry.
Credit Union Toolkit
· Credit Union Growth, Bank Acquisitions, and the Question of Tax Exemption: A Tax Day Reality Check
· Banks vs. Credit Unions: Regs, Taxes & Services
· The Truth About Credit Unions
· Credit Unions & Mutual Banks
· Credit Unions & Public Deposits
· Legislative Brief: Credit Unions & Public Deposits
Take Action
Sign the petition to urge Ohio lawmakers to promote tax fairness, protect taxpayer funds, and preserve a balanced and competitive financial system.
Sign the Banker Credit Union Petition HERE.