Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey issued the following statement in response to the latest acquisition of a tax-paying community bank by a tax-exempt credit union. As Congress considers tax reform, ICBA continues to call for eliminating the federal tax exemption for credit unions with more than $1 billion in assets to ensure taxpayer dollars no longer distort the financial services marketplace. Before this acquisition, Maps Credit Union’s assets already exceeded $1.4 billion.
“Last year marked a record number of credit union acquisitions of community banks, and the public as well as policymakers are increasingly questioning the fairness of subsidizing rapid consolidation in the community banking sector. Growth-obsessed credit unions now rival banks in size, holding trillions in assets while maintaining a nonprofit status that no longer reflects their operations. Credit unions have strayed far beyond their congressional mandate, which originally granted tax-exempt status to serve people of modest means in a defined field of membership, such as employees of a single company.
“While community banks focus on financing consumers’ dreams and supporting local businesses and the agriculture sector, growth-obsessed credit unions exploit their tax exemption to finance multimillion-dollar NFL stadium naming rights deals, fuel industry consolidation by acquiring community banks, and raise funds from Wall Street hedge funds and private equity firms. Eliminating the federal tax exemption for credit unions over $1 billion in assets will help protect choice for consumers and small businesses.”
ICBA’s ‘Repair, Reform, and Thrive’ plan and open letter to the 119th Congressurge lawmakers to use the current debate over tax reform to address credit unions’ tax and regulatory advantages. For the first time last year, the FDIC issued a statement of policy on bank mergers that explicitly stated additional scrutiny may be needed for deals involving credit unions, and consumers increasingly support reforms to credit union policies, with recent ICBA polling conducted by Morning Consult finding that 62% support a congressional investigation of the credit union industry’s tax and regulatory exemptions.
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 at icba.org.