As advocated by ICBA, the FDIC approved a new statement of policy on bank mergers that for the first time explicitly states that additional scrutiny may be needed for deals involving tax-exempt credit unions.
Policy Update: The FDIC statement of policy on agency reviews of bank mergers says:
Transactions involving a credit union may require additional information about their impact on the convenience and needs of affected consumers because credit unions are exempt from the Community Reinvestment Act.
Typical concentration measures such as the Herfindahl-Hirschman Index might be insufficient in rural markets, particularly those served by credit unions, Farm Credit System institutions, and other nonbanks.
ICBA Advocacy: In a June comment letter, ICBA called on the FDIC to expand the scope of its bank merger reviews to include credit unions because their diluted field-of-membership restrictions no longer limit the ability of credit unions to attract customers, especially given their tax-exempt status.
Latest ICBA Polling: Following the FDIC’s ICBA-advocated policy update, ICBA released new polling data showing Americans increasingly support a congressional review of credit union policy. According to the polling of U.S. adults conducted by Morning Consult:
61% say Congress should investigate whether credit unions should be able to acquire banks given credit unions’ tax and regulatory exemptions.
55% say policymakers should consider charging acquiring credit unions a fee on acquisitions of tax-paying banks to capture part of the lost tax revenue.
54% say Congress should investigate whether the credit union tax exemption is still warranted.
Previous Results: ICBA recently released results showing Americans are growing increasingly uneasy with credit unions’ regulatory exemptions and support reforms to policies that arbitrarily favor these tax-exempt financial firms.
