Independent Banker - June 2021 - 32
PORTFOLIO CHECKS & BALANCES
In 2019, president and
CEO Jill Sung of Abacus
Federal Savings Bank
testified before Congress
on issues facing minority
banks, including unfair
competition from taxexempt
credit unions.
Congress must
act on credit union
tax exemption
We're calling on Congress to hold hearings on credit unions'
misuse of their outdated tax exemption. With credit union
acquisitions of banks rising, policymakers must re-evaluate and
eliminate this exemption. By Aaron Stetter, ICBA
buying up taxpaying banks at an
alarming pace. Before 2012, credit
union acquisitions of banks or bank
assets were limited to two or three a
year. They have steadily ramped up
since then, with 13 acquisitions in
2018 and 21 in 2019.
ongress bestows tax exemptions
on certain industries to
incentivize certain activities
that ultimately serve the public
good. When a tax exemption stops
benefiting the public good, it should
be re-evaluated and eliminated.
It's a simple, common sense
argument-and one that ICBA is
C
making as it pushes back against the
nearly 90-year-old tax exemption for
the credit union industry.
For years, ICBA has sounded
the alarm bell about credit unions
exploiting their tax exemption to
fund rapid growth and nontraditional
product offerings, yet the trend
continues. Credit unions have been
These acquisitions are increasingly
large. As recently as 2019, most of
these deals involved community
banks with about $200 million in
assets. Now, $11 billion-asset VyStar
Credit Union in Jacksonville, Fla.,
has announced plans to purchase a
$1.6 billion-asset community bank in
Jonesboro, Ga. If it goes through, it
will be the largest bank ever bought
by a credit union.
Meanwhile, credit unions are
wading into uncharted waters, raising
capital through the sale of debt
securities to venture funds and other
outside investors, and partnering with
investment banks like Goldman Sachs
to finance million-dollar residences as
part as a $1 billion loan.
32 Q ICBA Independent Banker Q June 2021
Independent Banker - June 2021
Table of Contents for the Digital Edition of Independent Banker - June 2021
Table of Contents
Independent Banker - June 2021 - Intro
Independent Banker - June 2021 - Cover1
Independent Banker - June 2021 - Cover2
Independent Banker - June 2021 - Table of Contents
Independent Banker - June 2021 - 2
Independent Banker - June 2021 - 3
Independent Banker - June 2021 - 4
Independent Banker - June 2021 - 5
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Independent Banker - June 2021 - Cover3
Independent Banker - June 2021 - Cover4
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