Press Release: Washington, D.C. (May 17, 2024)—Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey issued the following statement following the latest acquisition of a tax-paying bank by a tax-exempt credit union.
“With tax-exempt credit unions accounting for roughly a quarter of this year’s bank acquisitions — each of which expands the federal tax exemption for more than $2 trillion in credit union assets and displaces a trusted provider of credit in local communities — Congress must act on this dangerous trend.
“Lawmakers have constituents on their side, with ICBA polling conducted by Morning Consult showing Americans support a congressional review of credit union policy. According to the polling, 68% of adults say credit union customers should have the same consumer protections that banks provide, such as those provided by the Community Reinvestment Act, while 54% say Congress should investigate whether the credit union tax exemption is still warranted.
“While this harmful trend has accelerated in recent years, there are long-standing solutions. States such as Tennessee, Colorado, Minnesota, Mississippi, and Nebraska have restricted these deals, and Congress should respond in kind to this national issue. ICBA and community bankers continue calling on Congress to hold hearings, request a Government Accountability Office study on the credit union industry, and consider 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.
“With the nation’s community banks serving as the nation’s leading small-business and agricultural lenders, Congress should use this opportunity to investigate the nation’s outdated credit union policies and whether the government should continue subsidizing acquisitions of local, taxpaying community banks.”
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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