Washington, D.C. (May 24, 2024) — Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey issued a statement following the latest acquisition of a tax-paying bank by a tax-exempt credit union.
“With tax-exempt credit unions now accounting for 10 bank acquisitions already in 2024 — roughly a quarter of this year’s acquisition total — Congress must act on this dangerous trend, which expands the federal tax exemption for more than $2 trillion in credit union assets and displaces trusted providers of credit in local communities,” Romero Rainey said.
ICBA polling conducted by Morning Consult indicates that Americans support a congressional review of credit union policy. According to the polling, 68% of adults believe credit union customers should have the same consumer protections that banks provide, such as those under the Community Reinvestment Act. Additionally, 54% say Congress should investigate whether the credit union tax exemption is still warranted.
“This harmful trend has accelerated in recent years, but state government developments demonstrate that solutions are available. Tennessee, Colorado, Minnesota, Mississippi, Nebraska, and other states have restricted these deals, and Congress should respond in kind to this national issue," Romero Rainey added. "ICBA and community bankers continue calling on Congress to hold hearings, request a Government Accountability Office study on the credit union industry, and consider an ‘exit fee’ on these acquisitions to capture the value of the tax revenue lost once the acquired bank’s business activity becomes tax-exempt.”
Romero Rainey emphasized that with community banks leading in serving small businesses and agricultural lenders, Congress should use this opportunity to investigate outdated credit union policies and whether government subsidies for acquisitions of local, taxpaying community banks should continue.
The Independent Community Bankers of America® aims to create and promote an environment where community banks can flourish through effective advocacy, education, and innovation. The ICBA supports America's community banks as they leverage their relationship-based business model to channel deposits into their neighborhoods, fostering economic prosperity.
For more information about ICBA's mission and initiatives, visit icba.org.