"Credit unions, unlike many other participants in the financial services market, are exempt from Federal and most State taxes because they are member-owned, democratically operated, not-for-profit organizations generally managed by volunteer boards of directors and because they have the specified mission of meeting the credit and savings needs of consumers, especially persons of modest means."(emphasis added)
But the credit union lobby finds this linkage between their tax exemption and having a mission to serve people of modest means as a major inconvenience.
Many credit unions and their trade associations keep trying to distance themselves from this truth.
The Credit Union National Association (CUNA) regularly points out that credit unions are tax exempt because they are member-owned, democratically operated, not-for-profit organizations generally managed by volunteer boards of directors, but you will rarely hear CUNA mention the second condition for the tax exemption -- serving consumers, especially people of modest means.
Since the tax exemption is tied to the mission of serving people of modest means, credit unions should demonstrate whether they are fulfilling this mission. Unfortunately, no one knows how credit unions are doing in serving people of modest means; because they are not required to measure their performance.
If you do not measure, you cannot know whether you are accomplishing this mission requirement.
But any attempt to measure credit union service to people of modest means is met with hostility by the credit union industry.
I suspect that the reason the credit union industry is unwilling to collect this information on who credit unions serve is that they don't want to face the inconvenient truth, as the Treasury Department recognized in 2008, that "[s]ome credit unions have arguably moved away from their original mission of making credit available to people of small means." And if these credit unions are no longer fulfilling their mission, this raises the thorny question -- why are they still tax exempt?