ICBA reiterates call for policy change following latest credit union acquisition

After a credit union in California leveraged its asset size and tax exemption to acquire a community bank, ICBA reiterated its call for policymakers to end the federal tax exemption for credit unions with $1 billion or more in assets.

Details: In a national news release, ICBA President and CEO Rebeca Romero Rainey noted that since 2010, more than 80% of acquisitions have involved a credit union with more than $1 billion in assets. “Credit unions have a mandate from Congress to serve people of modest means, though we repeatedly see growth-obsessed credit unions exploit their federal tax exemption to acquire taxpaying community banks and widen their already-massive footprints,” she said.

What It Means for Community Banks: Romero Rainey noted that in addition to concerns about the acquisition record set last year, billion-dollar credit unions are financing multimillion-dollar NFL stadium naming rights deals, buying private planes for senior executives, and raising funds from Wall Street hedge funds — all while enjoying a taxpayer-funded subsidy worth more than $2.5 billion.

Growing Scrutiny:

• A May Bloomberg article captured lawmaker concerns about the full federal tax exemption for credit unions.

• Recent ICBA polling conducted by Morning Consult shows 62% of U.S. adults say credit unions that operate like banks should have to pay taxes like banks.

• An ICBA policy resolution introduced earlier this year formally calls on policymakers to end the federal tax exemption for credit unions with $1 billion or more in assets.

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