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.