IRS 990 Filings Should Be Required for All Credit Unions

Last week a proposal that federal credit unions be required, as state charters must now do, to file an annual IRS 990 was reported.

There is useful information in the IRS form that is not available elsewhere, including details about the compensation of the CEO, senior managers and board (when applicable).

Here is a link to a sample for the largest state charter SECU-North Carolina at their fiscal yearend, June 30, 2024.  The initial pages are similar to call reports. Additionally, many yes-no questions about governance link to data in the subsequent schedules.

This full report would be even more valuable if the data of the two federal credit unions closest in size, Navy and PenFed, were available for comparison.

One part of this initial data includes the question about the disclosure/availability of thefiling to the public.  Most credit unions only check this option:   Upon request  In other words, filed, but not readily available.

Information not provided in other required call reports includes:

Schedule I:  Cash grants and Other Assistance to Domestic Organizations and Domestic Governments.

Schedule J: Compensation-Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees.   Also, Loans to and/or From Interested Persons including those funding split dollar life insurance-a retirement benefit described at the end of this post.

Schedule O:  Supplemental to Form 990 includes information on governance,  elections, salary oversight process et. al.

Should Federal Credit Unions Be required to File this IRS form?

I believe it is in the interests of individual credit unions and the industry that federal charters be required to file the same data as state charters.

Here’s why this filing should be standard operating practice.

Transparency is critical to democratic governance and accountability for credit unions’ elected leadership.

Compensation for CEO’s and senior staff (and when permitted board members) is the single most important indicator of personal stewardship of members financial assets.

It is vital in organizations that receive a tax exemption to maintain accountability in return for this benefit.  Especially so when most credit union competitors pay taxes.

State charters have been disclosing this information for over five decades. There has been no downside from the practice.  Public disclosure is a responsibility in return for this significant exemption.

There are problems with the practice, however.  The due date for filing is the 15^th day of the fifth month after the fiscal yearend.  That would be May 15^th or November 14^th for December or June fiscal years.  Many credit unions seek an extension; for example the SECU report was filed on May 29, 2025, versus the November deadline.  This means the information is often a year old.  Ideally the report would be sent to all members in their Annual Meeting information, as part of the year’s financial report.

Filings  Reviewed as Part of Examinations

Also when seeking specific reports via public sources such as Pro Publica, it is not unusual to find that some credit unions are apparently not filing.  There appears to be no regulatory enforcement or review to see if the information is correct.

Failure to file for three consecutive years results in a revocation of a credit union’s tax status-certainly a safety and soundness problem. No state charter should be approved for merger unless the most recent IRS 990 is available, as that information is critical to understanding the required Member Notice compensation disclosures.

Credit unions should support this 100% public filing for the movement.  That would demonstrate public responsibility and respect for the member-owners.

 Summary of 990 Filing Requirements for Credit Unions

All state-chartered credit unions that are tax-exempt under section 501(c)(14)(A) are required to file an annual information return with the IRS (either Form 990, 990-EZ, or 990-N), with the specific form dependent on their financial activity.

There is no asset level that completely exempts them from this filing requirement.

The specific form to be filed depends on an organization’s gross receipts and total assets:

• Form 990-N (e-Postcard): For organizations that normally have annual gross receipts of $50,000 or less.
• Form 990-EZ: For organizations with annual gross receipts less than $200,000 and total assets less than $500,000.
• Form 990: For organizations with gross receipts of $200,000 or more, or total assets of $500,000 or more.

Federal credit unions, in contrast, are exempt under section 501(c)(1) and are not required to file an annual information return with the IRS.

Failure to file the required return for three consecutive years will result in the automatic revocation of the organization’s tax-exempt status. The IRS provides resources on the Form 990 series filing requirements on its website.

Split Dollar Life Insurance-Employee Benefit Description from SECU NC’s latest 990 IRS filing.

SPLIT DOLLAR LIFE INSURANCE: THE CREDIT UNION HAS GRANTED NONRECOURSE LOANS FOR LIFE INSURANCE PREMIUM PAYMENTS TO SELECT MEMBERS OF SENIOR MANAGEMENT. THESE LOANS ARE COLLATERALIZED BY THE ASSIGNMENT OF THE CASH SURRENDER VALUE OF EACH RESPECTIVE LIFE INSURANCE POLICY. THE POLICIES ARE OWNED BY THE EXECUTIVES AND THE OWNERS HAVE SOLE CONTROL OVER THE LISTED BENEFICIARIES. UPON DEATH OF THE INSURED, THE PROCEEDS FROM THE DEATH BENEFIT OF THE LIFE INSURANCE POLICY ARE USED TO PAY THE OUTSTANDING BALANCE AND ACCRUED INTEREST OF THE LOANS. THE LOANS ARE CONSIDERED NONRECOURSE AND AS SUCH, THE CREDIT UNION HAS RECORDED THE BALANCE AS THE LOWER OF THE OUTSTANDING LOAN BALANCE PLUS ACCRUED INTEREST, OR THE CASH SURRENDER VALUE OF THE LIFE INSURANCE POLICIES.