Washington, D.C. — Independent Community Bankers of America (ICBA) President and CEO Rebeca Romero Rainey issued the following statement on the latest acquisition opens in a new tab of a tax-paying community bank by a tax-exempt credit union.
“The latest deal involving a multi-billion-dollar credit union 25 times larger than the local community bank it is acquiring exemplifies ICBA’s recent data analysis opens in a new tab showing that mega-credit union acquisitions of tax-paying community banks are harming small businesses and local communities. Given their negative impact on local communities, every one of these deals should serve as a wake-up call to policymakers.
“Following last year’s record number of acquisitions, the time to act is now given our research showing community banks disproportionately outperform credit unions in meeting the needs of the high-poverty areas that the credit union industry receives a federal tax exemption to serve. Continued economic growth in our nation’s local communities depends on much-needed changes to federal credit union policy.”
ICBA’s analysis of publicly available data shows:
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Community banks have provided roughly 69.3% of Small Business Administration loans provided by banks and credit unions since 2010, compared to 2.8% from credit unions.
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Community bank lending has also been disproportionately higher in the highest-poverty counties, with community banks accounting for 76.5% of SBA lending since 2010, compared with just 1.8% from credit unions.
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In areas where community banks participated in SBA lending programs, SBA lending fell after nearly 80% of credit union acquisitions.
The acquisition trend has led to increased criticism of credit unions straying beyond their founding congressional mandate of serving people of modest means with a defined field of membership, such as those with the same church or employer. Media reports have focused on credit unions abandoning their mission with “Wall Street-style” behavior opens in a new tab and increasingly acquiring community banks thousands of miles away opens in a new tab, while ICBA polling opens in a new tab conducted by Morning Consult earlier this year found 62% of U.S. adults support a congressional investigation of the credit union industry’s tax and regulatory exemptions.
ICBA’s “Repair, Reform, and Thrive” plan opens in a new tab and open letter to the 119th Congress opens in a new tab urge lawmakers to address credit union tax and regulatory advantages. Further, a 2025 ICBA policy resolution opens in a new tab calls on policymakers to end the federal tax exemption for credit unions with $1 billion or more in assets or to establish tax parity between credit unions and community banks.
About ICBA
The Independent Community Bankers of America® has one mission: to create and promote an environment where community banks flourish. We power the potential of the nation’s community banks through effective advocacy, education, and innovation.
As local and trusted sources of credit, America’s community banks leverage their relationship-based business model and innovative offerings to channel deposits into the neighborhoods they serve, creating jobs, fostering economic prosperity, and fueling their customers’ financial goals and dreams. For more information, visit ICBA’s website at icba.org.