WASHINGTON — As it kicks of its Capital Summit here this week, the Independent Community Bankers of America has released another poll it commissioned that it says shows Americans broadly support eliminating the tax exemption for credit unions that “act like banks.”
The bankers group also used the latest acquisition of a bank by a credit union (see related story) to again call for taxing credit unions of more than $1 billion in assets.
The survey was conducted this month by Morning Consult the ICBA said.
According to ICBA, the polling found majority support for changes to credit union policies, including:
- 58% of respondents who said credit unions that operate like banks should be taxed similarly.
- 58% also said Congress should investigate whether credit union tax and regulatory exemptions remain warranted.
- 56% said credit unions should face stricter regulations to justify their tax-exempt status
- 56% also said community banks should receive an equivalent tax benefit if credit unions retain their exemption.
- 56% said Congress should examine whether credit unions should be allowed to acquire tax-paying community banks.
- 60% of Republicans and 59% of Democrats said Congress should end the federal tax exemption for credit unions with more than $1 billion in assets.
Additional Findings
Beyond credit union issues, ICBA said respondents expressed support for policies aimed at strengthening community banks. According to the survey, 58% said the formation of new community banks is important to the health of the U.S. banking system, and an equal share supported reducing regulatory burdens to expand access to home loans, aligning with provisions in the 21st Century ROAD to Housing Act and the Main Street Capital Access Act.
On payments policy, ICBA said the poll showed opposition to proposed changes to credit card routing. According to the data, 63% of adults said consumers would bear the cost of altering transaction technology as outlined in the Credit Card Competition Act, and 61% said such changes would be risky. Another 63% said merchants would likely retain any savings rather than pass them on to consumers.
The survey also found support for maintaining the separation of banking and commerce. ICBA said 61% of respondents believe allowing commercial firms to own banks without full regulatory oversight—permitted under the industrial loan company framework—would increase risks to the financial system. Additionally, 59% said such arrangements could create conflicts of interest involving consumer financial data, an issue addressed in the Close the Shadow Banking Loophole Act.
Support for Rural Lending
Finally, ICBA said the poll showed backing for rural lending initiatives. According to the results, 71% of Democrats and 69% of Republicans said current economic conditions make it more important for Congress to pass a new farm bill this year. Seven in 10 respondents supported increasing loan limits for family farmers and ranchers, and 63% said the U.S. Department of Agriculture should be required to decide on farm loan applications within five business days, consistent with proposals in the USDA Express Loan Act.
Bank Acquisition Cited
Separately, the ICBA is also using this week’s announcement by Interra Credit Union in Indiana that it is acquiring The Hicksville Bank in Ohio as a reason to change the CU tax status.
“The latest acquisition of a tax-paying community bank by a larger, out-of-state credit union further validates the importance of this week’s ICBA Capital Summit, which will feature meetings between community banker attendees and policymakers on ICBA’s call to tax credit unions with over $1 billion in assets,” said President and CEO Rebeca Romero Rainey. ““As ICBA lays out in our recently launched The Illusionists campaign, large credit unions are promoting a narrative of community service while aggressively expanding beyond their original mission and undermining local communities. Through this campaign, we continue pulling back the curtain on how growth-obsessed credit unions are contributing to industry consolidation, reducing consumer choice, and weakening the local economies they claim to support.
“Given the harmful impact on local communities of the tax exemption for large credit unions, today’s announced acquisition shows the importance of our campaign and this week’s meetings with policymakers,” Romero Rainey added.
Credit Unions Respond
As the CU Daily has been reporting, ahead of the bankers’ visits the credit union trade associations have been working to head off the anti-CU messaging.
America’s Credit Unions said its new chief advocacy officer, Kathleen Coulombe, reached out to congressional offices on Tuesday to provide data on credit unions in advance of those meetings.
“She encouraged legislative offices to fact-check with their credit union contacts when bankers make erroneous claims,” America’s Credit Unions said. “Emphasizing that more than 146 million Americans count on credit unions for safe, affordable financial services, Coulombe pointed out that credit unions delivered $352 billion in total economic impact this past year, providing 1.3 million jobs. “
‘The Real Value’
“This is real value that impacts the consumers and communities within your district,” Coulombe wrote, adding that despite “tired, unsubstantiated claims that credit unions are the cause of community bankers’ problems,” it’s actually big banks that are the real competition for smaller banks.
America’s Credit Unions said Coulombe also reminded policymakers that the credit union tax status delivered an estimated $42 billion in financial benefits to American consumers last year, nearly 17 times the “cost” of the credit union tax status.
