Washington, D.C. — The Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey has issued a statement following the acquisition of a tax-paying community bank by Frontwave Credit Union. This marks the first such acquisition in 2025 and the first ever in California. The trend, which began in 2024, sees credit unions using their tax-exempt status to drive industry consolidation.
Romero Rainey expressed concern over this development: “The growing skepticism of credit unions’ tax and regulatory exemptions must evolve into policymaker action as another tax-paying community bank is acquired by a tax-exempt credit union, especially with Congress raising questions about Frontwave Credit Union’s treatment of military servicemembers."
She highlighted that credit unions are leveraging their tax exemption to make offers for healthy community banks, thereby increasing the federal tax exemption for nearly $2.2 trillion in assets. ICBA's 'Repair, Reform, and Thrive' plan urges Congress to address these advantages during ongoing debates over tax reform.
“Congress granted tax-exempt status to credit unions because they were intended to serve people of ‘modest means’ sharing a ‘common bond,’ but these justifications have been rendered meaningless," Romero Rainey stated. She pointed out that credit unions are now financing multimillion-dollar NFL stadium naming rights deals and called for policymakers to investigate whether taxpayers should continue subsidizing such consolidations.
The ICBA aims to foster an environment where community banks can thrive through advocacy, education, and innovation. These banks play a crucial role in local economies by providing credit and fostering economic prosperity.