The Independent Community Bankers of America (ICBA) has expressed concerns over the increasing number of acquisitions of tax-paying banks by tax-exempt credit unions. ICBA President and CEO Rebeca Romero Rainey highlighted that this year's 16th acquisition ties the record for most such deals in a single year. This trend is drawing attention from policymakers and the public, who are scrutinizing these transactions and questioning outdated credit union policies.

Rainey stated, "The latest acquisition of a tax-paying community bank by a tax-exempt credit union — which ties the record for most in a single year — comes as policymakers and the American public are increasingly scrutinizing these deals and the role of antiquated credit union policies."

The Federal Deposit Insurance Corporation (FDIC) recently approved a new policy statement on bank mergers, which now includes potential additional scrutiny for deals involving tax-exempt credit unions. This move aligns with ICBA's advocacy efforts. In June, ICBA urged the FDIC to broaden its bank merger reviews to include credit unions due to their expanded ability to attract customers beyond traditional field-of-membership restrictions.

ICBA's recent polling indicates significant consumer concern regarding these acquisitions. The survey conducted by Morning Consult found that 61% of U.S. adults, including 70% of Democrats and 64% of Republicans, believe Congress should investigate whether credit unions should be allowed to acquire banks given their tax advantages.

Rainey added, "ICBA and community bankers continue our calls for Congress to hold hearings and to consider an ‘exit fee’ on credit union acquisitions of tax-paying banks to capture lost tax revenue resulting from these deals." She referenced historical precedents where Congress revoked similar exemptions for other financial institutions operating like commercial banks.

With community banks playing a crucial role in supporting small businesses and agricultural lenders, ICBA urges Congress to thoroughly examine current credit union policies and assess whether government subsidies contributing to community banking consolidation remain justified.

About ICBA: The Independent Community Bankers of America aims to foster an environment where community banks can thrive through advocacy, education, and innovation. Community banks serve as local sources of credit, driving economic growth by investing deposits back into their communities.