Washington, D.C. (Aug. 27, 2024)—Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey today issued the following statement on today’s announcement from Northwest Federal Credit Union and the Washington Commanders.
“Today’s announcement that Northwest Federal Credit Union is leveraging its members’ deposits to spend $8 million each year for the Washington Commanders football stadium naming rights is just the latest example of how credit unions are violating the limits established by Congress to justify their federal tax exemption.
“As we said in a recent letter to Congress, modern credit unions exploit a tax exemption created nearly a century ago to help them ‘serve people of modest means’ within defined fields of membership. But the credit union tax exemption now subsidizes multi-million-dollar executive pay, outsized marketing budgets, lavish headquarters, and an ongoing surge in acquisitions of taxpaying community banks — all to benefit national financial firms whose regulator has rendered field-of-membership restrictions to the point of meaninglessness.
“We continue calling on Congress to hold hearings on the credit union industry’s tax and regulatory advantages and to consider an ‘exit fee’ on credit union acquisitions of taxpaying banks to capture lost tax revenue resulting from these deals. And we have the public on our side, with ICBA polling conducted by Morning Consult showing Americans support a congressional review of credit union policy, including the industry’s tax and Community Reinvestment Act exemptions.
“Lawmakers have not only their constituents on their side, but also historical precedent. In 1951, Congress revoked the tax exemption for building and loan associations, cooperative banks, and mutual savings banks, finding that these institutions operated much like commercial banks and should be taxed accordingly.
“With community banks leading the way in serving small businesses and agricultural lenders, Congress should similarly investigate the nation’s outdated credit union policies and whether the government should continue subsidizing community banking consolidation.”
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.
