Washington, D.C. (Jan. 29, 2020) —The Independent Community Bankers of America® (ICBA) today called on Congress to hold hearings on the surge in tax-exempt credit unions purchasing tax-paying community banks. In letters to relevant House and Senate committees, ICBA said this recent trend is the result of a long-term transformation of the credit union industry and that Congress should investigate how it is reshaping the financial services landscape.
“For decades, credit unions have used their tax subsidy and a permissive regulatory environment to expand their market share," ICBA President and CEO Rebeca Romero Rainey wrote. "What’s happening today — credit union 'weaponization' of their tax subsidy and lax regulatory environment to purchase whole community banks — is an order of magnitude more significant and warrants Congressional scrutiny.”
In its letters to the House committees on Financial Services and Ways and Means and the Senate committees on Banking and Finance, ICBA said the surge in large credit unions increasing their taxpayer-subsidized footprint by buying up community banks worsens banking industry consolidation, reduces tax revenues for local communities, and furthers these tax-exempt companies' encroachment into full-service banking.
Noting that credit union powers have expanded well beyond the limits established by Congress to justify that industry’s tax exemption, ICBA encouraged the committees to consider legislative solutions, such as taxing the largest and most growth-oriented credit unions and expanding regulatory scrutiny of these transactions.
ICBA's request is part of its ongoing initiative to "Wake Up" policymakers and the public to the growing threats posed by tax-exempt credit unions. ICBA will continue calling on policymakers and the public to open their eyes to the risky practices, costly tax subsidies, and irresponsibly lax oversight of the nation’s credit unions.
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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