Washington, D.C. (Jan. 11, 2024)—Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey issued the following statement on recent acquisitions of tax-paying community banks by tax-exempt credit unions.
“The surge in credit unions leveraging their taxpayer subsidies to acquire local community banks has devastating implications for local communities that go well beyond the expansion of the federal tax exemption for more than $2 trillion in credit union assets. With the nation’s community banks accounting for roughly 60% of U.S. small-business loans and 80% of agriculture loans, each credit union acquisition displaces a critical and trusted provider of credit, further consolidates the banking industry, and increases the portion of the industry exempt from Community Reinvestment Act oversight.
“While states such as Colorado, Minnesota, Mississippi, and Nebraska have pushed back against these deals in their states, this trend is a matter of federal policy and national economic importance. Congress should respond by holding hearings, requesting a Government Accountability Office study on the credit union industry, and considering an ‘exit fee’ on these acquisitions to capture the value of the tax revenue lost once the acquired bank’s business activity becomes tax-exempt.
“As credit union banking acquisitions continue, policymakers are responsible for investigating whether federal policy should continue to support this alarming trend.”
About ICBA
The Independent Community Bankers of America® has one mission: to create and promote an environment where community banks flourish. We power the potential of the nation’s community banks through effective advocacy, education, and innovation.
As local and trusted sources of credit, America’s community banks leverage their relationship-based business model and innovative offerings to channel deposits into the neighborhoods they serve, creating jobs, fostering economic prosperity, and fueling their customers’ financial goals and dreams. For more information, visit ICBA’s website at icba.org.
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