‘Wake Up’ Campaign Highlights Credit Union Threats, Outdated and Costly Tax Exemption
Washington, D.C (Oct. 21, 2019)—The Independent Community Bankers of America® (ICBA) today launched a nationwide campaign calling on policymakers and the public to “Wake Up” to the risky practices, costly tax subsidies, and irresponsibly lax oversight of the nation’s credit unions. ICBA’s “Wake Up” campaign will encourage policymakers to open their eyes to the growing threats posed by these financial firms’ abandonment of their founding mission facilitated by their captive federal regulator, the National Credit Union Administration.
“ICBA and the nation’s community banks are calling on Washington to stop pressing the snooze button and wake up to the risks of aggressive, growth-obsessed credit unions and the costs of their taxpayer-funded subsidies,” ICBA President and CEO Rebeca Romero Rainey said. “With credit unions abandoning their founding mission in the name of expansion and risky lending, it is long past time for Congress to level the playing field between community banks and credit unions while reining in the National Credit Union Administration’s expand-at-all-costs agenda.”
ICBA’s “Wake Up” campaign will feature legislative and regulatory proposals, comprehensive research, grassroots advocacy campaigns, and customizable resources to help community banks nationwide continue the call for policymakers to review credit unions’ $2 billion taxpayer-funded annual subsidy. It follows the formation of the ICBA Credit Union Task Force to take on the disturbing trend of large credit unions using their tax subsidy to buy smaller, taxpaying community banks—a trend that is worsening industry consolidation, reducing tax revenues for local communities, and furthering credit unions’ unbridled encroachment into full-service banking.
ICBA and community banks have long opposed the credit union industry’s unwarranted federal tax subsidy and the NCUA’s attempts to drastically increase the powers of tax-exempt credit unions beyond their statutory limits. With the help of a federal agency that has shown repeated lapses in regulatory oversight while cheerleading the industry it is charged with regulating, credit unions have abandoned their founding tax-exempt mission of serving people of modest means with a common bond.
“On the heels of the NCUA’s failure to prevent irresponsible credit union lending abuses in the New York taxi medallion scandal, which led to financial ruin for thousands of families, now is the time for policymakers to finally re-examine the credit union industry’s tax and regulatory subsidies,” said ICBA Chairman Preston L. Kennedy, president and CEO of Zachary Bancshares Inc. in Zachary, La. “With credit unions posing so many risks to their members, the financial system and taxpayers nationwide, Washington needs to wake up and address the credit union industry gone rogue.”
The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. With more than 50,000 locations nationwide, community banks constitute 99 percent of all banks, employ nearly 750,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5 trillion in assets, nearly $4 trillion in deposits, and more than $3.4 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.
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