Washington, D.C. (June 16, 2020) — The Independent Community Bankers of America® (ICBA) called on the National Credit Union Administration to expand on its proposed rule to provide more transparency and disclosures when large, tax-exempt credit unions acquire smaller, tax-paying community banks.
"The growing trend of large credit unions using their taxpayer-funded subsidies to acquire smaller, tax-paying community banks worsens banking industry consolidation, reduces the tax base of local communities, and furthers the credit union industry's encroachment into full-service banking without paying their fair share of taxes," ICBA President and CEO Rebeca Romero Rainey said today. "While ICBA welcomes the NCUA’s efforts to bring much-needed attention to this trend, more is needed to increase the transparency of these deals."
Among its recommendations, ICBA called on the NCUA to:
- Recognize that growth-oriented credit unions are targeting healthy community banks.
- Require credit unions to provide additional disclosures and member communications.
- Assess the impact of these acquisitions on acquired banks' local communities.
- Verify whether acquired bank customers are eligible to be members of acquiring credit unions.
ICBA's comment letter follows a recent Medium op-ed from ICBA Vice Chairman Brad Bolton encouraging small credit unions to support congressional oversight of NCUA regulations benefitting the largest and riskiest credit unions. "While Main Street lenders have been helping their communities through the coronavirus pandemic, the federal credit union regulator has used the crisis to benefit the largest credit unions — at the expense of community banks and small credit unions alike," he wrote.
ICBA will continue calling on policymakers and the public to "Wake Up" and 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.
# # #