The Independent Community Bankers of America supports ending the tax exemption for credit unions with more than $1 billion in assets.
ICBA support for ending the tax exemption for larger credit unions was announced March 12 during its annual convention in Nashville. Ending the tax exemption “will help ensure taxpayer dollars no longer tilt the competitive marketplace, subsidize community banking consolidation, and result in fewer choices for consumers and small businesses,” said ICBA President and CEO Rebeca Romero Rainey.
As of the end of last year, 445 U.S. credit unions managed at least $1 billion in assets, up from 272 in 2016. Those credit unions control a large portion of the overall industry’s assets. In 2024, 4,126 credit unions had less than $1 billion in assets.
The proposal was unveiled after 22 CU-bank deals were announced last year, surpassing the previous record of 16 in 2022. Loans at credit unions have increased 8.8 percent on an annualized basis, higher than the 8.0 percent average growth for banks. The number of CU members increased 44 percent to more than 135 million in 2022 from 94 million in 2012.
Congressional action on ending the tax exemption for credit unions has remained elusive for years. No current member of Congress has explicitly called for credit unions to pay taxes.
The credit union industry pushed back on ICBA’s call to end the tax exemption. Calls to end the tax-exempt status of larger credit unions “shows banker complaints have always been solely about getting rid of credit unions,” said National Credit Union Administration President/CEO Jim Nussle.
“It seems like every day the credit union industry faces a new attack from the bank lobby, but this time, they’ve really shown their cards,” Nussle added. “Shifting their target away from all credit unions to now just the largest in the industry, shows they know their message is weak with lawmakers and consumers alike.”