The cost of the credit union tax exemption is nearly $27 billion, he added, citing the Treasury Department. Additionally, he said the Prochnow Foundation reported 61% of the consumer benefits go to households with incomes totaling more than $95,000.

He further explained that a very small portion of the tax exemption benefits are passed to the consumers. According to a study from the non-partisan Tax Foundations, most of the tax benefit was retained by the credit unions themselves by paying higher salaries or increasing the size of the credit union, he said.

“The status quo is unacceptable,” Nichols said. “On this day, when individuals and businesses will settle up with the government for nearly $2 trillion in federal income taxes, it is simply not fair that the entire credit union industry pays nothing. The public policy justification disappeared long ago and taxpayers should no longer subsidize these large aggressive credit unions.”

He urged the chairman not to let the status quo stop the committee from ending the outdated tax exemption and added a repeal of the tax exemption would be a fiscally sound way to reduce the U.S. debt.

In response, NAFCU President/CEO Dan Berger countered Nichols' statements in his own letter to the House Ways and Means Committee.

“What the bankers do not tell you is that nearly one-third of banks are Subchapter S corporations and pay no corporate income tax,” Berger said. “If credit unions have such an extraordinary advantage, why aren't banks lining up to convert to credit unions?”