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Urgent congressional action is needed to preserve community banks and the communities that depend on them, ICBA President and CEO Rebeca Romero Rainey said.
Details: In a national press release following the latest credit union acquisition of a community bank, Romero Rainey said credit unions exploit their federal tax exemption and acquire community banks, threatening Main Street America’s banking sector. Credit union purchases of community banks now account for 20% of all bank acquisitions this year.
More Coverage: A recent article from American Banker (subscription required) 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.