New op-ed spotlights data showing harmful impact of credit union acquisitions

A new op-ed from ICBA leadership bankers says public data show why policymakers should examine the impact of federal tax subsidies on credit union acquisitions of community banks.

Negative Impact: In the Tyfone op-ed, ICBA Past Chairman Brad Bolton, president and CEO of Community Spirit Bank in Red Bay, Ala., and ICBA leadership community banker Ken Hale, president and CEO of BOM Bank in Natchitoches, La., cite a recent ICBA analysis that found:

• Community banks account for roughly 69.3% of SBA loans provided by banks and credit unions since 2010, compared to 2.8% from credit unions.

• In service areas affected by credit union acquisitions in which community banks participated in SBA programs, SBA lending fell after the acquisition nearly 80% of the time.

• In service areas affected by an acquisition, 61% experienced an increase in mortgage denial rates.

Growing Media Scrutiny: The op-ed joins a growing list of articles covering the harm of credit union acquisitions of community banks:

• In recent op-eds in the Natchitoches Parish Journal and the Shreveport Bossier Journal, Hale details how credit union acquisitions of community banks harm local communities.

• Recent op-eds in American Banker and RealClear Markets target the credit union tax exemption following ongoing ICBA advocacy.

• A previous article in The Banker—an imprint of the Financial Times—says some credit unions may be abandoning their mission with “Wall Street-style” behavior and no longer serving their core members.

• In The CU Daily, retired credit union CEO Ed Speed cites the loosening of field-of-membership rules, regulatory maneuvering that exploits tax advantages, and expansion-focused growth strategies.

Recent ICBA Advocacy: ICBA this summer called on policymakers to end the federal tax exemption for credit unions with $1 billion or more in assets to uphold market choice for small businesses and consumers while addressing taxpayer-subsidized consolidation.

READ THE OP-ED