WASHINGTON–Credit unions frequently talk of the power of grassroots advocacy; now a bank trade association is turning to its grassroots to lobby Congress about CU acquisitions of banks.
The Independent Community Bankers of America (ICBA) said it has launched an alert to Congress on its Be Heard grassroots action center and released a customizable op-ed and talking points to “spread the word in local news media” about the purchases of banks by credit unions.
The issue, according to ICBA President Rebecca Romero Rainey, is that taxpayers should be “concerned” because the deal diminish “tax revenues and further solidifies a publicly subsidized sector of the financial services industry.”
Romero Rainey wrote that credit unions with some $24 billion in combined assets have acquired community banks worth less than a tenth as much in assets over the past year.
According to the ICBA, the acquisition of banks by credit unions results in the loss of “roughly $3.9 million annually in income taxes, adding to the nearly $2 billion annual cost to taxpayers of the federal credit union tax exemption.”
Romero Rainey said the ICBA is now collecting “examples of egregious credit union actions by submitting photos and anecdotes to firstname.lastname@example.org.
‘Runaway Freight Train’
“Taxpayer-subsidized credit unions are a runaway freight train, acquiring community banks at an alarming rate and costing taxpaying Americans billions in the process,” the ICBA states on its website. “We need your help to communicate to Congress that these purchases diminish tax revenues and further solidifies a publicly subsidized sector of the financial services industry. As a community banker, your voice is unique and critical to stopping this trend, improving your community and saving taxpayers billions of dollars.
“Please take action and ask your member of Congress to exercise much needed oversight over an industry out-of-control,” the text reads.
Task Force Formed
The new grassroots effort follows the creation of a “task force” by the ICBA to address what it called the “disturbing trend” of bank acquisitions, as CUToday.info reported here.
In addition, the ICBA has also asked Congress to investigate NCUA for its role in the meltdown of taxi medallion-lending credit unions, which it called a “scandal.”