New op-ed: Credit union tax status hasn’t kept up with changing industry

A new community banker op-ed says credit unions have changed and are abusing their tax advantage to acquire tax-paying community banks.

Details: In Crain’s Chicago Business (registration required), Rich Eckert—president and CEO of Beardstown Savings in Beardstown, Ill., and a member of ICBA’s Mutual Bank Council—says:

• Mutual savings banks operate exactly the way most people think credit unions do, but mutuals pay state and federal income taxes while credit unions do not.

• Mutuals are governed by the Community Reinvestment Act and required to meet the credit needs of the areas where they operate, while credit unions face no comparable mandate.

• Many credit unions have grown into billion-dollar behemoths that have strayed far from their original mission to serve community-bond groups.

• State lawmakers should take swift action to protect communities from losing critical tax revenue, local institutions, and access to capital.

ICBA View: Following the first acquisition of a tax-paying community bank by a tax-exempt credit union in 2026, ICBA last month called for policymakers to address the harmful impact these deals have on local communities.

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: Recent articles scrutinizing credit union policies include:

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

• An American Prospect article detailing 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 spotlighting why policymakers should examine credit union acquisitions of community banks.