Credit unions are acquiring community banks at a record rate, and outdated policies are subsidizing these deals, ICBA President and CEO Rebeca Romero Rainey wrote in a new op-ed in American Banker.
Details: With the number of transactions and value of bank assets sold to credit unions at or above all-time highs already in 2024, Romero Rainey said these acquisitions are fueled by a federal tax exemption that hasn’t been updated since 1934. She also noted these acquisitions displace critical providers of capital in local communities and expand the portion of the financial services industry exempt from Community Reinvestment Act requirements.
ICBA Advocacy: Following the latest acquisition of a tax-paying bank by a tax-exempt credit union last month, ICBA said that while several states have restricted these deals, this trend is a matter of federal policy and requires congressional action. ICBA polling released earlier this year showed Americans support reforms to policies that arbitrarily favor credit unions.
Grassroots Resources: Community bankers can use ICBA’s Be Heard grassroots action center to call on members of Congress to hold a hearing on credit union policy. Additional resources are available on the ICBA website.
