Industry trade groups are continuing their efforts to take away the credit unions' federal tax exemption, saying it gives large credit unions an unfair advantage, an article in the Los Angeles Times said.

The reform is now gaining momentum since lawmakers are starting to work on a major overhaul of the tax code.

According to the report, the exemption ended up costing $1.6 billion in taxes this year alone.

Credit unions believe efforts to kill the tax exemption are attempts at stifling competitiveness in the overall marketplace.

"The banking industry has no problem with competition. We have problems with competition when it's on an un-level playing field," said James Ballentine, the American Bankers Association's executive vice president of congressional relations.