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The ICBA-opposed trend of tax-exempt credit unions acquiring taxpaying community banks generated a new round of headlines.
Historical Leniency: A new Axios article cites the credit union tax and Community Reinvestment Act exemptions and the “historical leniency” of credit union oversight. ICBA President and CEO Rebeca Romero Rainey also told the outlet that credit union acquisitions hamper small-business lending in local communities.
Controversial Deals: A separate article from American Banker (subscription required) on the latest acquisition noted these deals are controversial. It cited ICBA’s calls for Congress to hold hearings on credit union policy and its proposal to implement an "exit fee" on these deals to recoup the value of the tax revenue lost once an acquired bank's business activity becomes tax-exempt.
ICBA View: ICBA has repeatedly called on Congress to investigate the credit union tax and regulatory advantages, including in a recent American Banker op-ed from Romero Rainey. In a recent letter to House Ways and Means Committee members, it called on lawmakers to review credit union tax exemptions.
Public Opinion: ICBA polling released earlier this year showed Americans support reforms to policies that arbitrarily favor credit unions. According to the polling conducted by Morning Consult, 68% of adults said credit union customers should have the same CRA protections that banks provide, while 54% said Congress should investigate whether the credit union tax exemption is still warranted.
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.