Washington, D.C (Jan. 31, 2018)—Independent Community Bankers of America® (ICBA) President and CEO Camden R. Fine released the following statement following a letter from Senate Finance Chairman Orrin Hatch (R-Utah) to the National Credit Union Administration expressing concern that credit unions may be operating beyond their tax-exempt purpose.
“ICBA thanks Sen. Hatch for speaking out against the tax-exempt credit union industry, which for too long has enjoyed the benefits of competing with tax-paying community banks. Sen. Hatch’s comments echo ICBA’s belief that the credit union model has become outdated and that its charter, purpose and tax-exempt status should be reviewed by Congress.
“Credit unions were chartered by Congress to enable people of small means with a ‘common bond’ to pool their resources to meet their basic deposit, savings and borrowing needs. While some credit unions operate that way today, the NCUA has enabled others to grow their membership and their markets well beyond their statutory mission.
“Credit unions are also aggressively expanding into business lending. According to the NCUA, total business lending by credit unions ballooned from $13.4 billion in 2004 to $56 billion in September 2015, an annualized growth rate of 14 percent. As Sen. Hatch’s letter indicates, credit unions will receive a tax exemption valued at approximately $2.9 billion this year.
“Large, multi-bond and geographic-based credit unions have exceeded their statutory mission and use their tax-exempt, government-subsidized status to gain competitive advantage over taxpaying community banks. ICBA urges Congress to level the tax and regulatory playing field between community banks and credit unions. Bank-like credit unions should be subject to the same laws and regulations as banks—including taxation and the Community Reinvestment Act.”
The Independent Community Bankers of America®, the nation’s voice for nearly 5,700 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services. For more information, visit ICBA’s website at www.icba.org.