U.S. consumers are generally unaware of the differences between banks and credit unions and believe credit unions should be held to the same 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. A wide majority of respondents (62%) said that Congress should examine whether credit unions are providing enough community benefit to warrant their existing tax exemption, while only 14% opposed such an examination. It has been nearly 20 years since Congress last held a hearing to conduct oversight of the federal tax exemption that credit unions receive.
“Since Congress last convened a hearing on the credit union tax exemption in 2005, the credit union industry has undergone a metamorphosis,” said Robert Flock, ABA’s vice president of strategic engagement. “Credit unions have a congressionally mandated mission to prioritize service to lower and middle income communities; however, they increasingly prioritize growth by advocating for changes to membership rules, raising money from investors, and even buying banks. American consumers agree that Congress should conduct oversight of the $2 trillion credit union industry to ensure that its mission – the justification for its tax exemption – aligns with its activities.”
Additionally, only 18% of Americans are aware that credit unions do not pay federal taxes, while 82% are unaware of credit unions’ tax status. In fact, nearly a third of consumers mistakenly thought that credit unions do pay them. Nearly three times as many consumers believe credit unions should pay federal taxes just like banks compared to those who feel they should not (49% vs. 18%, respectively). A majority of consumers also believe that 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 are (53% in support vs. 15% in opposition, respectively).
The survey also provides important perspective on how consumers view the regulation of non-banks. Most adults care if the business that handles their finances is regulated like a bank (65%), and the vast majority (80%) agrees that any business providing bank-like services to consumers should have to comply with the same rules and regulations that banks do.
ABA released an accompanying infographic highlighting the survey results. 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 revealing that Americans are highly satisfied with their bank and competitive financial services marketplace, highly value overdraft protection and want Congress to allow banks to serve cannabis-related businesses. The full results for today’s survey questions are as follows:
When asked “It has been nearly 20 years since Congress last held a hearing to conduct oversight of the federal tax exemption that credit unions receive. Do you agree or disagree that Congress should examine whether credit unions are providing enough community benefit to warrant receiving a tax exemption?” consumer provided the following answers:
- Strongly support – 28%
- Somewhat support – 34%
- Somewhat oppose – 9%
- Strongly oppose – 5%
- Don’t Know/No Opinion – 24%
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 – 18%
- Credit unions pay federal taxes – 28%
- Don’t Know/No Opinion – 54%
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 – 49%
- Credit unions should not pay federal taxes just like banks– 18%
- Don’t Know/No Opinion – 33%
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. – 53%
- 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. – 15%
- Don’t Know/No Opinion – 32%
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 regulated like a bank – 65%
- I don’t care if the business that handles my finances is regulated like a bank – 10%
- Don’t Know/No Opinion – 25%
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 have to comply with the same rules and regulations that banks do.” consumers provided the following answers:
- Strongly agree – 53%
- Somewhat agree – 27%
- Somewhat disagree – 4%
- Strongly disagree – 2%
- Don’t know – 13%
About the Survey
This poll was conducted by Morning Consult on behalf of the American Bankers Association from September 20-22, 2023, among a national sample of 2,211 adults. 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 2 percentage points.