Legislative & Regulatory Update

As Congress resumes work on budget reconciliation, credit unions may face important policy decisions that could affect their future. 

By John Alexander, DakCU Director of Legislative & Regulatory Affairs

Staying the Course: Credit Unions and the Reconciliation Landscape
As Congress returns from its spring recess, budget reconciliation has once again taken center stage—and credit unions need to be paying attention. The process has begun in earnest in the House, with key committees working through the first stages of a complex, high-stakes legislative effort. While much remains in flux, the potential implications for credit unions are real—and now is the time to stay engaged and vocal.

In the early stages, lawmakers are focusing on the more straightforward elements of the bill—things like defense funding and border security, which tend to garner broad support. But those are just the opening moves. The more difficult conversations are still ahead, including proposed spending cuts and significant tax reforms. And it’s in these next phases where decisions could be made that impact the credit union tax status.

We’ve seen it before: late-night negotiations, last-minute changes, and sweeping amendments introduced in the eleventh hour. That’s why the Dakota Credit Union Association continues to emphasize the importance of consistent, proactive advocacy. It's not about reacting to a crisis—it’s about ensuring we’re part of the conversation from the very beginning.

Of particular concern is the ongoing uncertainty around how lawmakers plan to balance spending cuts with tax priorities. Some proposals include trimming tax credits from the Inflation Reduction Act, introducing new taxes on large university endowments, or revisiting the SALT cap for businesses. These discussions are fluid—and credit unions, while not the focus of current proposals, could be drawn in if lawmakers begin to search for additional revenue sources.

At the same time, President Trump has floated broader ideas, including replacing personal income tax with tariffs. While this isn’t expected to become policy, it signals how open-ended and unpredictable the tax debate has become. As a result, preserving the not-for-profit tax status of credit unions must remain a top priority.

We’re working closely with our national partners and maintaining regular contact with our delegation to ensure our message is clear: credit unions serve their communities in ways that are fundamentally different from other financial institutions. Our tax status reflects that mission, and changing it would jeopardize the work we do every day to support members, especially those in rural and underserved areas.

Speaker Mike Johnson remains optimistic about moving the bill through the House before Memorial Day, but most observers expect the process to extend into summer. The real deadline may well be the “X date”—the point at which the federal government exhausts its borrowing capacity, now projected for early fall.

In the meantime, we encourage all credit unions to continue engaging in advocacy efforts. Whether it’s attending a political events, participating in town halls, or simply sharing your credit union’s impact with lawmakers, every effort makes a difference.

The path ahead is uncertain, but our mission remains the same: to protect the credit union model and the people we serve. Let’s stay informed, stay engaged, and stay united.

Stack the PAC - May 12 in Fargo, ND
Held Monday evening at Summit 2025, this exclusive donor recognition event honors the heroes of advocacy: YOU. Whether you've chipped in $24 or championed us with a President-level donation, this is your night to be celebrated. The room will buzz with conversation, clinking glasses, and the kind of gratitude that lingers long after the last toast. So, check your inbox, not your mailbox. RSVP through Green Envelope. Join us at Stack the PAC on May 12. Because progress waits for no one—and neither should you.
 
Stay Connected
For more information or to share your perspectives, feel free to contact me.