Washington, D.C. (May 1, 2024)— In response to the recent acquisition of a tax-paying bank by a tax-exempt credit union, President and CEO of the Independent Community Bankers of America (ICBA), Rebeca Romero Rainey, emphasized the need for congressional action. Romero Rainey stated, “Tax-exempt credit unions now account for nearly a quarter of this year’s bank acquisitions, with each one expanding the federal tax exemption for more than $2 trillion in credit union assets and displacing a critical and trusted provider of credit in local communities."
Romero Rainey pointed out that ICBA polling indicates strong public support for a congressional review of credit union policies. She cited a Morning Consult poll showing that "68% of adults say credit union customers should have the same consumer protections that banks provide" and "54% say Congress should investigate whether the credit union tax exemption is still warranted."
The ICBA President outlined potential solutions to address this issue, highlighting actions taken by states like Tennessee, Colorado, Minnesota, Mississippi, and Nebraska to restrict such acquisitions. However, she stressed that federal intervention is crucial, suggesting measures such as holding hearings, requesting a Government Accountability Office study on the credit union industry, and considering an 'exit fee' on these acquisitions to recapture lost tax revenue.
Romero Rainey urged Congress to examine the impact of outdated credit union policies on local, taxpaying community banks, emphasizing the vital role these banks play in providing small-business and agriculture loans. She concluded by calling for a reevaluation of government subsidies for credit union acquisitions to ensure the continued support of community banks.
The Independent Community Bankers of America (ICBA) is dedicated to fostering an environment where community banks can thrive through advocacy, education, and innovation. As trusted sources of credit, community banks support economic growth by providing personalized services that benefit the neighborhoods they serve. For more information, visit ICBA’s website at icba.org.