Second billion-dollar credit union acquisition of a community bank this week

After a second acquisition this week of a taxpaying community bank by a tax-exempt, billion-dollar credit union, ICBA continued to 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 lawmakers granted credit unions a full federal tax exemption on the condition they serve defined fields of membership, like teachers or firefighters in one region, but a growing number have exploited this tax loophole to grow exponentially.

What It Means for Community Banks: Romero Rainey noted 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.

READ MORE