Katie BaileyBy Roy Bibb, President and CEO, MidSouth Community Federal Credit Union, and Vice Chair of The League
There’s a familiar refrain we hear when credit unions grow or succeed: “They’re acting too much like banks.” The recent commentary from the Community Bankers Association of Georgia is the latest salvo seeking to discredit credit unions for doing what we’ve always done—serving our community and serving our members.
Let’s set the record straight.
Credit unions are not-for-profit financial cooperatives owned by the people who use them. That structure is foundational and a fundamental difference that drives how we operate and why we exist. Unlike banks, which are accountable to shareholders and driven by quarterly profits, credit unions are accountable to their members. Every dollar we earn goes back into the credit union in the form of lower loan rates, higher savings returns, reduced fees, and community investment.
Georgia consumers clearly value that difference. In the last decade, credit union membership in the state has grown by more than 30%, with more than 2.3 million Georgians now choosing a credit union over a bank (America’s Credit Unions, 2024). That growth is driven not by tax advantages, but by trust, value, and care. A recent article by CUInsight found that credit unions deliver up to $35 billion in member benefits annually—yielding approximately a 10-to-1 return for every dollar saved in taxes.
The claim that credit unions “don’t pay taxes” is not just misleading—it’s false. Credit unions do pay payroll taxes, property taxes, sales taxes, and a host of other fees. We are exempt from federal income taxes because of our structure and mission to promote thrift and provide access to credit for provident purposes—not to enrich investors. Congress has repeatedly affirmed this exemption, recognizing that credit unions fill a critical gap in the financial system by serving populations banks have historically ignored or underserved (National Credit Union Administration, 2023).
While credit unions are not subject to the Community Reinvestment Act (CRA), we don’t need a federal mandate to do what’s right for our members and the communities we serve. The CRA was created in 1977 to prevent redlining and to hold for-profit banks accountable. Unlike banks, credit unions were not the ones redlining neighborhoods or refusing mortgages to qualified borrowers in marginalized communities. We were created to ensure access to fair financial services in those very areas. As of December 2023, over 53% of low-income designated credit unions report a specific focus on serving low-income members, offering affordable loans, higher savings yields, and lower fees (America’s Credit Unions, 2024).
The notion that credit unions’ success comes at taxpayers’ expense also doesn’t hold up. The $3.1 billion in so-called “lost” taxes cited by opponents is a recycled argument that ignores the value we provide. The credit union tax exemption costs the federal government less than 0.01% of the federal budget, while delivering billions in consumer benefits and economic activity (Joint Committee on Taxation, 2023). And let’s not forget: in 2023, the banking industry reported nearly $300 billion in net income—much of it paid out as dividends to shareholders, not reinvested in communities (FDIC Quarterly Banking Profile, 2023).
Finally, credit unions are not buying up banks to become them. We are stepping in where banks have walked away. Between 2012 and 2022, more than 4,000 bank branches closed across the U.S., disproportionately in rural and low-income communities (National Community Reinvestment Coalition, 2023). In that same timeframe, credit unions opened more than 1,400 branches. That trend is just as pronounced in Georgia. Since 2020, banks have closed nearly 300 branches in the Peach State. Meanwhile, credit unions continue to invest in our communities and have stepped up to serve the financial needs of Georgians, opening more than a dozen branches since 2021 (Credit Union Times Report), with many more in planning.
Community bankers may want to create a narrative that positions credit unions as a threat, but the truth is simple: people are choosing credit unions because they are mission-driven, member-owned, and community-focused. Still, credit unions in Georgia hold just about 10% of the total financial institution asset market share, compared to banks’ 90%. It’s a testament to how much opportunity remains for consumers to benefit from credit unions.
At MidSouth Community Federal Credit Union, and at credit unions across Georgia, we will continue to do what we’ve always done: put people over profits and serve our communities—not distant stakeholders.
