WASHINGTON–Just as credit unions are headed to Washington for CUNA’s GAC, the nation’s community bankers are again pressing Congress to eliminate the credit
union tax exemption.
As part of its newly released Community Focus 2020: The Community Bank Agenda for Expanding Economic Opportunity, the ICBA states, “Tax-exempt credit unions have become virtually indistinguishable from tax-paying commercial banks. Today’s credit unions are leveraging their tax subsidy for rapid growth, purchasing multi-million-dollar stadium naming rights, flaunting their nearly unlimited fields of membership, and expanding their activities well beyond their original mission.”
The document goes on to state the largest credit union (Navy Federal) is approaching $100 billion in assets.
“Many credit unions are aggressively pushing into commercial lending,” the ICBA said. “Others are trying to get into wealth management. ICBA urges Congress to restore balance to the American financial services marketplace and help close the growing budget deficit by re-examining the outmoded credit union tax subsidy.”
Bankers Want Fintechs Addressed
Similarly, the bankers also expressed opposition to any “regulatory subsidy for fintech.”
“Congress should ensure that online marketplace lenders or other fintech companies are not given an unfair regulatory advantage over depository institutions such as community banks,” the ICBA said. “In particular, the Office of the Comptroller of the Currency should not issue a special-purpose charter for fintech companies without explicit statutory authority from Congress. Any new federal charter should be subject to the same standards of safety, soundness, and fairness as other federally chartered institutions.”
Other portions of the ICBA’s legislative agenda actually align with many of the priorities of credit unions, including regulatory relief and banking services for cannabis-related businesses.