The Independent Community Bankers of America (ICBA) is urging policymakers to end unwarranted federal tax subsidies for the nation’s largest credit unions.
It follows a new policy initiative that ICBA introduced at this week’s ICBA LIVE 2025 national convention in Nashville. The policy calls on lawmakers to end the federal tax exemption for credit unions with $1 billion or more in assets or to establish tax parity between credit unions and tax-paying community banks.
“With credit union acquisitions of tax-paying community banks reaching a record high last year, the growing skepticism of credit unions’ tax and regulatory exemptions must evolve into policymaker action,” ICBA President and CEO Rebeca Romero Rainey said. “Eliminating the federal tax exemption for credit unions over $1 billion in assets 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.”
ICBA’s policy resolution was advanced as policymakers are increasingly scrutinizing credit union acquisitions of community banks. Last year, the FDIC stated for the first time in a statement that additional scrutiny may be needed for deals involving credit unions.
According to a recent ICBA poll conducted by Morning Consult, 62 percent of U.S. adults say credit unions that operate like banks should have to pay taxes like banks. Further, it found that 62 percent support a congressional investigation of the credit union industry’s tax and regulatory exemptions.