Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey has issued a statement following the record-setting 17th acquisition of a tax-paying bank by a tax-exempt credit union this year. This milestone comes amid growing scrutiny from policymakers and the public regarding these transactions and outdated credit union policies.

Romero Rainey stated, "Acquisitions of tax-paying community banks by tax-exempt credit unions have set a record high this year at precisely the moment that policymakers and the American public are increasingly scrutinizing these deals and the role of antiquated credit union policies."

Credit unions have accounted for approximately one-quarter of banking industry acquisitions this year. In response, the Federal Deposit Insurance Corporation (FDIC) has approved a new policy statement on bank mergers, indicating that additional scrutiny may be necessary for transactions involving tax-exempt credit unions. The ICBA had previously urged the FDIC to expand its review scope to include such mergers due to concerns over diluted field-of-membership restrictions that allow credit unions to attract more customers while benefiting from their tax-exempt status.

According to recent polling conducted by Morning Consult for ICBA, 61% of U.S. adults, including 70% of Democrats and 64% of Republicans, believe Congress should investigate whether credit unions should be permitted to acquire banks given their tax and regulatory exemptions. Earlier results indicated increasing public unease with these exemptions and support for policy reforms favoring tax-exempt financial institutions.

The issue has garnered attention from major media outlets such as Bloomberg, CNBC, Axios, and CNN. In light of this trend, ICBA is advocating for congressional hearings on the matter and proposing an "exit fee" on credit union acquisitions of tax-paying banks to offset lost tax revenue.

Romero Rainey noted that similar reforms have been enacted in the past: "This needed policy change is in line with previous banking industry reforms. In 1951, Congress revoked the tax exemption for building and loan associations, cooperative banks, and mutual savings banks."

She emphasized that with community banks serving as key lenders for small businesses and agriculture nationwide, Congress should examine whether current policies subsidize community banking consolidation unnecessarily.

The Independent Community Bankers of America is committed to fostering an environment where community banks can thrive through advocacy, education, and innovation. They focus on supporting local economies by channeling deposits into communities they serve.