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Washington, D.C. (Oct. 9, 2024) — Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey today issued the following statement after this year’s 18th acquisition of a tax-paying bank by a tax-exempt credit union — expanding on this year’s annual record.
“With the fifth acquisition this year of a tax-paying community bank by a tax-exempt credit union in Washington State, it should come as no surprise that policymakers and the American public are increasingly scrutinizing the shocking record amount of these deals and the role of antiquated credit union policies.
“The FDIC recently approved a new statement of policy on bank mergers that for the first time explicitly states that additional scrutiny may be needed for deals involving tax-exempt credit unions — as advocated by ICBA. And according to ICBA’s latest polling conducted by Morning Consult, 61% of U.S. adults — including 70% of Democrats and 64% of Republicans — say Congress should investigate whether credit unions should be able to acquire banks given credit unions’ tax and regulatory exemptions.
“As the news media increasingly takes notice — with recent Bloomberg, CNBC, Axios, and CNN coverage raising questions about credit union practices — it is past time for policymakers to do something about this increasingly concerning trend. ICBA and community bankers continue our calls for Congress to hold hearings and to consider an ‘exit fee’ on credit union acquisitions of tax-paying banks to capture lost tax revenue resulting from these deals.
“In addition to public sentiment, policymakers have history on their side. 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banks serving as the nation’s leading small-business and agricultural lenders, Congress should investigate the outdated credit union policy treatment driving this trend and whether the taxpayers should continue subsidizing community banking consolidation.”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.