ICBA urges credit union tax reform as acquisitions continue

Following the latest reported acquisition of a tax-paying community bank by a tax-exempt credit union—the second deal of the year—ICBA continued calling for policymakers to address the favorable credit union tax treatment that is driving these deals.

Details: In a national news release, ICBA President and CEO Rebeca Romero Rainey said as Congress works to advance various policy priorities this year, it is time for lawmakers to eliminate the federal tax exemption for credit unions over $1 billion in assets.

Real-World Impact: A recent ICBA data analysis details how these acquisitions are harming small businesses and local communities, finding that in areas where community banks participated in Small Business Administration lending programs, SBA lending fell after nearly 80% of credit union acquisitions.

Growing Media Scrutiny:

• A recent Crain’s Chicago Business op-ed (registration required) says credit unions have changed and are abusing their tax advantage to acquire tax-paying community banks.

• A December Open Banker op-ed from ICBA breaks down its data analysis on how credit union acquisitions harm consumers and local communities.

• An American Prospect article details how some credit unions are taking advantage of their industry’s tax and regulatory exemptions to stray from their roots and acquire tax-paying competition.

• A Tyfone op-ed from ICBA Past Chairman Brad Bolton and ICBA leadership community banker Ken Hale spotlights why policymakers should examine credit union acquisitions of community banks.