Main Street Matters Blog

Taking on Credit Union Poaching

Jun 20, 2019

rebeca-romero-rainey_110x160By Rebeca Romero Rainey

ICBA and community bankers are speaking out about a disturbing trend that should unsettle all taxpayers: large credit unions buying up smaller community banks. As I wrote in a recent op-ed in American Banker, nine credit unions with some $24 billion in combined assets have acquired community banks worth less than a tenth as much in assets over the past year.

While this is hard to swallow for many community bankers, other taxpayers should be just as concerned, given that each deal diminishes tax revenues and further solidifies a publicly subsidized sector of the financial services industry. These transactions alone amount to a loss of roughly $3.9 million annually in income taxes, adding to the nearly $2 billion annual cost to taxpayers of the federal credit union tax exemption.

To shine a light on this costly and inequitable rash of credit union acquisitions, ICBA has formed a task force that continues our long-standing call for policymakers to re-examine the credit union tax and regulatory subsidies. But to truly raise public awareness of this problem, we need community bankers to make some noise. That's why we've launched an alert to Congress on our Be Heard grassroots action center and released a customizable op-ed and talking points to spread the word in local news media. Meanwhile, community bankers can send us examples of egregious credit union actions by submitting photos and anecdotes to

The task force follows ICBA’s recent call for Congress to investigate the National Credit Union Administration's role in the taxi medallion scandal exposed by The New York Times. In this case of regulatory neglect, irresponsible lending dominated by half a dozen credit unions led to financial ruin for thousands of families as well as a spate of tragic taxi driver suicides. This is just the latest misstep of a regulator that typically acts as an industry advocate, rather than a conscientious supervisor.

ICBA will continue working with community bankers to urge policymakers in Washington and state capitals nationwide to act on this unbalanced arrangement. As the unsettling trend of acquisitions shows, it’s long past time for policymakers to level the financial services sector’s tax and regulatory responsibilities.

Rebeca Romero Rainey is ICBA president and CEO.