Credit union acquisitions of community banks received renewed media attention this week with a new article on the largest acquisition so far this year.
Latest Coverage: The article from Tyfone notes a deal announced in July would be one of the largest credit union acquisitions of a bank in U.S. history. The article cites a statement from ICBA President and CEO Rebeca Romero Rainey noting that nearly two-thirds of credit union acquisitions involve a bank with a positive net operating income in the preceding five years.
ICBA Response: Following the announcement in July, ICBA noted on social media that the deal was the third acquisition in one week of a tax-paying community bank by a billion-dollar, tax-exempt credit union. In national news releases earlier in the week, ICBA called on policymakers to end the federal tax exemption for credit unions with $1 billion or more in assets to uphold market choice for small businesses and consumers while addressing taxpayer-subsidized consolidation.
Data Shows Harm of Acquisitions: ICBA recently conducted a data analysis demonstrating that credit union acquisitions of community banks are harming small businesses and local communities. As detailed in a Main Street Matters blog post, the ICBA analysis found that in areas where community banks participated in Small Business Administration lending programs, SBA lending fell after nearly 80% of credit union acquisitions.
Growing Media Scrutiny:
In recent op-eds in the Natchitoches Parish Journal and the Shreveport Bossier Journal, ICBA leadership community banker Ken Hale details how credit union acquisitions of community banks harm local communities.
Recent op-eds in American Banker and RealClear Markets target the credit union tax exemption following ongoing ICBA advocacy.
A previous article in The Banker—an imprint of the Financial Times—says some credit unions may be abandoning their mission with “Wall Street-style” behavior and no longer serving their core members.
In The CU Daily, retired credit union CEO Ed Speed cites the loosening of field-of-membership rules, regulatory maneuvering that exploits tax advantages, and expansion-focused growth strategies.
A recent American Banker article says credit unions are indeed announcing more and more bank acquisitions, sometimes thousands of miles away.