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NAFCU Vice President of Legislative Affairs Brad Thaler on Thursday defended credit unions and the federal tax exemption in a message to Hill offices in response to an attack by the Independent Community Bankers of America (ICBA).

"When ICBA attacks credit unions, they fail to tell you the full truth," Thaler wrote. "As they attack the tax status of credit unions, they fail to mention that over 1/3 of banks, including a number of their members, are Subchapter S corporations and pay no corporate income tax."  

Thaler noted that while banks pay other taxes, credit unions do too.

He noted that the credit union industry has grown since the 2008 financial crisis "as many Americans have turned away from banks and banks have turned away from them;" reiterating that banks exist to make a profit and credit unions exist to meet the financial needs of their members. Thaler also pointed out that the total number of credit unions has declined in recent years. "Regulatory burdens have led to consolidation across the financial services industry, including with both credit unions and community banks," he wrote.

"With this ever increasing regulatory burden on community financial institutions, we would hope that the ICBA and their members would be more focused on working with their counterparts in the financial services industry to achieve meaningful regulatory relief that will allow all financial institutions to better serve consumers, rather than spending their efforts attacking credit unions," Thaler concluded. 

An independent tax study released by NAFCU found the credit union tax exemption benefits $16 billion to the U.S. economy each year.