ICBA: Acquisition by controversial credit union fuels need for policy action

ICBA said the latest announced acquisition of a community bank by a tax-exempt credit union—featuring a controversial credit union and the first such deal in California—demands a policy response.

ICBA Response: In a national news release following the acquisition by Frontwave Credit Union, which has faced questions from Congress over its treatment of military servicemembers, ICBA said the growing skepticism of credit unions’ tax and regulatory exemptions must evolve into policymaker action.

Increased Attention: The acquisition is the first of the year and follows a record-setting 2024. The problem of credit union acquisitions and regulatory inequity has received increased attention, including from 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.

ICBA View: ICBA’s “Repair, Reform, and Thrive” plan and recent open letter to the 119th Congress urge policymakers to use the current debate over tax reform to address credit unions’ tax and regulatory advantages. In a recent blog post, ICBA Past Chairman Brad Bolton said the momentum for policy change is growing as credit unions stray from their founding mission.