Off the Record, On the Issues with John

Credit unions won a key tax battle in D.C. but new threats are already on the horizon.

By John Alexander, DakCU Director of Legislative & Regulatory Affairs

The Billion-Dollar Battle: Why Credit Unions Just Won Washington’s Quietest War
It did not make the evening news. It didn’t trend on Twitter. But behind closed doors and inside the polished corridors, a financial war raged, and credit unions won.

HR 1, the sweeping House tax legislation “the Big Beautiful Bill”, sailed through committee without touching one of the most sacred pillars of Main Street America: the well-earned not-for-profit tax status of credit unions. That might not sound flashy, but it’s monumental. It’s the legislative equivalent of defusing a ticking bomb without anyone noticing it was ever armed.

The fight to preserve the credit union tax exemption wasn’t just about economics, it was about values. It was about telling lawmakers that when they protect credit unions, they’re not just defending an institution; they’re standing up for teachers, truck drivers, single moms, and retirees. People who don’t have lobbyists but who count on credit unions for their financial lives.

Last year alone, credit unions provided over $27 billion in direct financial benefits to their members. But the impact doesn’t stop there. When credit unions raise the bar, banks follow suit, meaning the ripple effect hits $38 billion in savings for all consumers. That’s a return on investment of 1,300 percent.

“Find another government policy that generates that kind of impact. Go ahead, I’ll wait.” – John Alexander

And yet, had the exemption been stripped, the fallout would have been staggering: a $33 billion hit to federal revenues over a decade, $266 billion shaved off our GDP, and over 822,000 American jobs wiped out. That’s not just numbers. That’s lives upended, dreams deferred, and communities destabilized.

The Fight Isn’t Over… It’s Evolving
While we celebrate this hard-fought victory, we remain vigilant. Across the Senate, eyes are watching, amendments are brewing, and two particularly dangerous ones have emerged as “poison pills” to otherwise promising legislation.
First, there’s Senator Marshall’s Credit Card Competition Act marketed as consumer-friendly but in reality, a Trojan horse for Big Box stores. By slapping price controls on interchange fees, it threatens to make credit cards more expensive, less secure, and harder to access. Credit unions, especially smaller ones, will bear the brunt. That’s why DakCU, along with America’s Credit Unions, Leagues, and other financial allies, are going full throttle to keep this amendment off the table.

Then there’s Senator Hawley’s credit card interest rate cap proposal—an emotional crowd-pleaser on the surface... sure, a fiscal wrecking ball beneath absolutely! Capping rates at 10% sounds nice until you realize it would drive millions into the arms of payday lenders, pawn shops, or worse. Research shows that when credit dries up, people cut essentials like reliable transportation, healthcare, and rent. We mustn’t let good intentions pave a road to financial ruin.

NCUA: Changes Afoot and Reasons for Optimism
Back on the regulatory front, the NCUA is undergoing a transformation. At their first open board meeting since February, Chairman Kyle Hauptman laid out his vision for the future, including gradual staffing shifts and an extended examination cycle a move we wholeheartedly support. This smarter, more strategic approach allows the agency to focus resources where they’re needed most, while giving our well-run credit unions the space to thrive without excessive oversight.

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