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Washington, D.C. (May 24, 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 now accounting for 10 bank acquisitions already in 2024 — roughly a quarter of this year’s acquisition total — Congress must act on this dangerous trend, which expands the federal tax exemption for more than $2 trillion in credit union assets and displaces trusted providers of credit in local communities.
“ICBA polling conducted by Morning Consult shows Americans support a congressional review of credit union policy, so lawmakers have the backing of their constituents in examining this issue. 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.
“This harmful trend has accelerated in recent years, but state government developments demonstrate that solutions are available. Tennessee, Colorado, Minnesota, Mississippi, Nebraska, and other states 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 community banks leading the way in serving small businesses and agricultural lenders, Congress should use this opportunity to investigate the nation’s outdated credit union policies and whether the government should continue subsidizing acquisitions of local, taxpaying community banks.”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.