The Federal Deposit Insurance Corporation (FDIC) has announced a new policy statement on bank mergers, which now includes additional scrutiny for deals involving tax-exempt credit unions. This decision follows advocacy from the Independent Community Bankers of America (ICBA). The move comes amid an increase in credit union acquisitions of tax-paying community banks.
Rebeca Romero Rainey, President and CEO of ICBA, commented on the development: “With the FDIC now recognizing that credit unions’ bank acquisitions may require additional scrutiny following ICBA outreach, our latest polling shows the Americans who subsidize the credit union industry are increasingly skeptical of whether they’re getting their money’s worth.” She added that Congress should investigate credit union practices and reconsider the longstanding tax exemption for these institutions.
The FDIC's updated policy states that transactions involving a credit union might need further information regarding their impact on consumer convenience and needs. This is because credit unions are exempt from the Community Reinvestment Act. ICBA had previously urged the FDIC to include credit unions in its merger reviews due to their ability to attract customers beyond traditional membership restrictions, aided by their tax-exempt status.
Recent polling conducted by Morning Consult reveals significant public support for congressional review of credit union policies. According to the data:
- 61% of respondents, including majorities from both major political parties, believe Congress should investigate whether credit unions should acquire banks given their tax and regulatory exemptions.
- 55% think policymakers should consider imposing fees on acquiring credit unions to offset lost tax revenue.
- 54% support investigating whether the credit union tax exemption remains justified.
ICBA has highlighted growing public concern over regulatory exemptions enjoyed by credit unions and advocates for policy reforms.
Further details on federal credit union policy can be found on the ICBA website.