After latest credit union acquisition, ICBA says policymakers must act

The record-extending 22nd credit union acquisition of a community bank in 2024 demands a response from policymakers, ICBA said following the announcement of the latest deal.

ICBA Response: In a post on LinkedIn, ICBA President and CEO Rebeca Romero Rainey said that when a credit union takes over a community bank, the tax revenues that would have gone to support local communities disappear.

Statement: “It’s time for policymakers to consider whether the current tax and regulatory framework for credit unions is still warranted in today's marketplace,” Romero Rainey said.

Growing Attention: The problem of credit union acquisitions and regulatory inequity received increased attention throughout 2024, including by:

• The FDIC, which approved a statement of policy on bank mergers that explicitly states that additional scrutiny may be needed for deals involving credit unions.

• Federal Reserve Governor Michelle Bowman, who said regulatory disparities between community banks and credit unions distort competition.

• The Consumer Financial Protection Bureau, which penalized VyStar Credit Union for harming consumers through its botched rollout of an online banking system.

• Consumers, 61% of whom in a recent ICBA poll conducted by Morning Consult poll said Congress should investigate whether credit unions should be able to acquire banks.

• Media such as Bloomberg, CNBC, Axios, and CNN, which have covered the acquisition trend and credit union practices.