Credit union acquisitions of community banks represent an "obscene" use of taxpayer subsidies and should be reviewed by Congress, ICBA's Paul Merski told Banking Dive. In a new article, Merski said a hearing on the credit union tax exemption is long overdue.
"The proposition that a credit union can grow, tax exempt, and use that tax-exempt benefit to then turn around and displace a taxpaying entity, taking that taxpaying bank out of the market and converting it to a non-tax-generating entity, is kind of a perverse use of the credit unions' tax exemption," Merski said.
ICBA last month asked Congress to request a Government Accountability Office study on the evolution of the credit union industry and National Credit Union Administration supervision. It will continue calling on policymakers and the public to “Wake Up” to the risky practices, costly tax subsidies, and irresponsibly lax oversight of credit unions.