Following the latest acquisition of a community bank by a tax-exempt credit union, ICBA said the deal demonstrates why the growing skepticism of credit union tax and regulatory exemptions must evolve into policymaker action.
Growing Skepticism: In a national news release following the deal, ICBA President and CEO Rebeca Romero Rainey cited growing media attention to credit unions abandoning their mission and continued ICBA’s call for policymakers to eliminate the federal tax exemption for credit unions over $1 billion in assets.
Credit Union Mission Creep: The new acquisition follows a recent op-ed in which a former credit union CEO targets the evolution of the credit union industry away from its founding mission. In The CU Daily, retired CEO Ed Speed cites the loosening of field-of-membership rules, regulatory maneuvering that exploits tax advantages, and expansion-focused growth strategies.
Ongoing Media Scrutiny:
A recent Shreveport Bossier Journal op-ed from ICBA leadership community banker Ken Hale notes that credit union acquisitions of community banks result in local and state governments losing revenue that helps fund local schools, projects, and infrastructure.
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.
A recent American Banker article says credit unions are indeed announcing more and more bank acquisitions, sometimes thousands of miles away.
What It Means for Community Banks: The rising media attention to the credit union tax exemption comes as ICBA continues calling on policymakers to end the tax exemption for credit unions over $1 billion in assets.