ICBA: Credit union-bank deals are dangerous and harmful

The nation’s community banks have seized on the recently announced purchase of a bank by Houston’s largest credit union to renew their demand that Congress act “on this dangerous and harmful trend.”

Texas Dow Employees Credit Union (TDECU), Houston’s largest credit union, announced on April 30 that it was purchasing Sabine State Bank and Trust Company, a Louisiana bank. When the transaction closes next year, the combined institution will have about $6 billion in assets and 471,000 Members.

“Tax-exempt credit unions now account for nearly a quarter of this year’s bank acquisitions, with each one expanding the federal tax exemption for more than $2 trillion in credit union assets and displacing a critical and trusted provider of credit in local communities,” Rebeca Romero Rainey, president/CEO of the Independent Community Bankers of America, said late last week.

Romero Rainey renewed her call for Congress to hold hearings on the bank purchase issue. She said the Government Accountability Office should conduct a study on the credit union industry and that Congress should consider requiring an exit fee to make up for the tax revenue lost when credit unions purchase banks.

 

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