Credit unions lobbying Washington while tax exemption fuels acquisitions of taxpaying banks
Washington, D.C. (March 2, 2022) — With representatives from tax-exempt credit unions in Washington this week for meetings with congressional offices, the Independent Community Bankers of America (ICBA) is calling on lawmakers to ask tough questions about the credit union tax exemption.
During this week’s Credit Union National Association Governmental Affairs Conference, congressional offices can ask credit union officials about:
- The role of the credit union tax exemption in the recent spike in credit union acquisitions of taxpaying community banks, which exacerbate industry consolidation and increase the portion of the financial services industry exempt from taxation and the Community Reinvestment Act.
- A recent National Credit Union Administration rule that allows the largest credit unions to partner with private institutional investors to reap greater gains off the credit union tax exemption, which changes the credit union cooperative ownership structure and jeopardizes the basis of credit union taxpayer subsidies.
- Whether federally chartered credit unions should file IRS Form 990 like nearly all other tax-exempt organizations to ensure transparency of their financial operations.
“With tax-exempt credit union representatives this week lobbying Congress for even more favorable treatment from Washington, ICBA is calling on lawmakers to ask how credit union policies are fueling industry consolidation, reducing financial choice, and limiting taxation and Community Reinvestment Act oversight,” said ICBA President and CEO Rebeca Romero Rainey, who detailed the institutional investor issue in a recent LinkedIn op-ed. “Congress granted credit unions a tax exemption to serve people of modest means—not to subsidize their growth at the expense of local communities. After nearly a century, it’s time for Congress to take a hard look at credit union policies.”
ICBA for the next several weeks is running a targeted digital campaign encouraging congressional offices to press credit union representatives on these issues during meetings and on social media.
More information, including a new video urging Americans to advocate congressional hearings on how credit unions are taxed and regulated, is available on ICBA’s “Wake Up” page.
About ICBA
The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.
With nearly 50,000 locations nationwide, community banks constitute roughly 99 percent of all banks, employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding nearly $5.9 trillion in assets, over $4.9 trillion in deposits, and more than $3.5 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.
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