National Survey: Majority of U.S. Consumers Think Congress Should Hold Credit Unions Accountable

U.S. consumers believe federal credit unions should be held accountable for meeting the same legal standards as the banks they compete with for customers every day, according to a new survey conducted by Morning Consult on behalf of the American Bankers Association. In addition, three times as many consumers believe credit unions should pay federal taxes just like banks compared to those who feel they should not (51% vs. 17%, respectively). Only 17% of Americans are aware that credit unions do not pay federal taxes, while 84% are unaware of credit unions’ tax-exempt status.

By a 5-to-1 margin (59% vs. 12%), consumers believe that credit unions should have the same disclosure and taxation requirements as other tax-exempt organizations. Most tax-exempt organizations must file a special IRS form called Form 990 to ensure basic transparency and compliance with U.S. laws for non-profits. Most tax-exempt organizations also pay taxes on business income unrelated to their tax-exempt mission. Credit unions not only enjoy a federal tax exemption but are also exempt from filing Form 990 and from paying unrelated business income tax. 

“Today’s credit union industry has leveraged its preferential tax and regulatory treatment to grow rapidly and increasingly acquire tax-paying banks — something that clearly does not reflect Congress’ original intent,” said Rob Nichols, ABA president and CEO. “These new survey results show that Americans overwhelmingly agree taxpayers and credit union members deserve increased transparency and accountability.”

Since the late 1970’s, banks have had to demonstrate their commitment to provide credit to every corner of the communities they serve. The survey shows a majority of Americans now want credit unions to do the same. Fifty-four percent of respondents believe that credit unions should be subject to annual community reinvestment reporting requirements as banks are today, while just 14% oppose that requirement.

The survey also provides important perspective on how consumers view the regulation of non-banks, including credit unions and fintechs. Most adults (76%) care if the business that handles their finances is held to the same legal standard for consumer protection as a bank and the vast majority (86%) agree that any business providing bank-like services to consumers should be held to the same standards for consumer protection as a bank. By a decisive 6-to-1 margin, consumers said credit union acquisitions of banks should receive the same level of regulatory scrutiny as bank mergers (61% said they should vs 11% who said they shouldn’t). 

This new survey data follows growing calls for heightened credit union accountability. Earlier this year, National Credit Union Administration Chairman Todd Harper raised serious concerns about credit union oversight and priorities, and Federal Reserve Governor Michelle Bowman called for greater regulatory parity between credit unions and other entities that compete with community banks. CFPB Director Rohit Chopra also testified to Congress that credit unions should be subject to Community Reinvestment Act requirements, and the FDIC said in its new bank merger policy statement that credit unions may need to provide additional information when applying to acquire FDIC-insured institutions as credit unions are not subject to the CRA. At ABA’s recent annual convention, Rep. Claudia Tenney (R-N.Y.) agreed that Congress needs to hold an oversight hearing on credit unions in light of the growing number of credit union acquisitions of taxpaying banks.

With the NCUA poised to issue a rulemaking requiring disclosures around executive compensation, ABA recently sent a letter to Chairman Harper encouraging even more transparency and accountability in the credit union industry, particularly when it comes to credit union acquisitions of banks. 

“A growing number of regulators and members of Congress have joined consumers across the country in calling for relevant laws and regulations governing credit unions to be modernized to reflect the industry’s growth,” said Nichols. “Credit unions should welcome this opportunity to demonstrate how they are meeting their mission.”

ABA released an accompanying infographic highlighting the survey findings. The data released today is the latest in a series of results gauging U.S. consumers’ preferences and opinions regarding banks and their services. ABA recently released additional survey data on major policy issues such as credit card rewards, debit interchange fees paid by retailers, overdraft protection and cannabis banking, as well as data revealing that Americans are happy with their bank and the options available to them, view banks as a source of strength for the economy, and trust banks most to protect them from fraud. The full results for today’s survey questions are as follows:

When asked “To the best of your knowledge, which of the following best describes how credit unions pay federal taxes?” consumers provided the following answers:

• Credit unions do not pay federal taxes – 17% 
• Credit unions pay federal taxes – 23% 
• Don’t Know/No Opinion – 61%  

When asked “Knowing what you know about the similarities between credit unions and banks, which of the following comes closest to your view, even if neither is exactly right?” consumers provided the following answers:

• Credit unions should pay federal taxes just like banks – 51% 
• Credit unions should not pay federal taxes just like banks– 17% 
• Don’t Know/No Opinion – 32%  

When asked “Knowing what you know about the similarities between credit unions and banks, which of the following comes closest to your view, even if neither is exactly right?” consumers provided the following answers:

• Credit unions should be subject to community reinvestment reporting requirements that quantify their impact on all segments of their communities, including low- and moderate-income areas, just like banks. – 54% 
• Credit unions should not be subject to community reinvestment reporting requirements that quantify their impact on all segments of their communities, including low- and moderate-income areas, just like banks. – 14% 
• Don’t Know/No Opinion – 32%    

When asked “Do you agree or disagree that federal credit unions should have the same disclosure and taxation requirements as other tax-exempt organizations?” consumers provided the following answers:

• Strongly agree – 27%
• Somewhat agree – 32%
• Somewhat disagree – 8%
• Strongly disagree – 4%
• Don't know – 28%

When asked “Do you agree or disagree with the following statement? Any business providing bank-like services (i.e. checking and savings accounts, loans, etc.) to consumers should be held to the same standards for consumer protection that banks are.” consumers provided the following answers:

• Strongly agree – 65%
• Somewhat agree – 21%
• Somewhat disagree – 2%
• Strongly disagree – 2%
• Don't know – 10%

When asked “Which of the following comes closest to your view, even if neither is exactly right?” consumers provided the following answers:

• I care if the business that handles my finances is held to the same legal standard for consumer protection as a bank – 76% 
• I don’t care if the business that handles my finances is held to the same legal standard for consumer protection as a bank – 5% 
• Don’t Know/No Opinion – 18%

When asked “Knowing what you know about the similarities between credit unions and banks, which of the following comes closest to your view, even if neither is exactly right?” consumers provided the following answers:

• Credit union acquisitions of banks should receive the same level of regulatory scrutiny as bank mergers. – 61% 
• Credit union acquisitions of banks should not receive the same level of regulatory scrutiny as bank mergers. – 11% 
• Don’t Know/No Opinion – 28%  

About the Survey

This poll was conducted by Morning Consult on behalf of the American Bankers Association from October 7-10, 2024, among a national sample of 4,508 adults split into two representative groups for specific question sets (Split Sample A n=2,266 | Split Sample B n=2,020). The interviews were conducted online and the data were weighted to approximate a target sample of adults based on age, race/ethnicity, gender, educational attainment, and region. Results from the full survey have a margin of error of plus or minus 1 to 2 percentage points.