A new op-ed from ICBA leadership community banker Ken Hale says lawmakers must investigate whether credit unions’ tax-exempt status is still necessary in light of their significant growth, which is leaching revenue from state and local governments and setting the stage for higher taxes on local communities.
Details: In the Shreveport Bossier Journal, Hale—the president and CEO of BOM Bank in Natchitoches, La.—says:
Credit union acquisitions of community banks result in local and state governments losing revenue that helps fund local schools, projects, and infrastructure.
In an era of credit unions operating more like large financial institutions and less like community-oriented lenders, Congress should conduct oversight hearings and reexamine whether credit unions’ tax-exempt status still aligns with their actions today.
Growing Media Scrutiny:
Recent op-eds in American Banker and RealClear Markets target the credit union tax exemption following ongoing ICBA advocacy.
A previous article in The Banker—an imprint of the Financial Times—says some credit unions may be abandoning their mission with “Wall Street-style” behavior and no longer serving their core members.
A recent American Banker article says credit unions are indeed announcing more and more bank acquisitions, sometimes thousands of miles away.
What It Means for Community Banks: The rising media attention to the credit union tax exemption comes as ICBA continues calling on policymakers to end the tax exemption for credit unions over $1 billion in assets. Recent ICBA polling conducted by Morning Consult shows 62% of U.S. adults say credit unions that operate like banks should have to pay taxes like banks.