The Independent Community Bankers of America is launching a new offensive in its long-running fight with credit unions.
The trade group's Wake Up initiative, unveiled Monday, aims to provide more evidence to lawmakers and consumers to support its argument that credit unions have an unfair competitive advantage over community banks.
The campaign will include legislative and regulatory proposals, grass-roots advocacy and more resources bankers can use to argue for a repeal of credit unions' tax-exempt status.
ICBA officials said the group hasn’t fully fleshed out many of the proposals it expects to put forward. The decision to go head and move forward with the launch reflects how strongly member banks feel about credit unions, they said.
“I’ve just come out of meetings with community bankers and the volume has never been louder,” said Alan Keller, the ICBA’s first vice president of legislative policy.
Credit union advocates were quick to respond.
The effort is “strangely misaligned," said Dan Berger, president and CEO of the National Association for Federally-Insured Credit Unions.
“It’s not pointed at their real problem — the big banks are eating the community banking industry’s lunch," Berger said. “The only thing community banks are really upset about is that their customers are beginning to notice that it’s better to bank without bankers. With so much at stake here in Washington, D.C., ICBA and its members would better benefit from looking at their own bank peers and industry malpractices as the reason for their challenges."
Banker criticism of the tax exemption — which the ICBA says amounts to a $2 billion annual subsidy — and the National Credit Union Administration is far from new. But it has taken on greater urgency in the past year as a long string of credit unions announced bank acquisitions. Other issues, such as expanded field of membership, member business loans and supplemental capital, have garnered more attention from the NCUA in recent years.
The ICBA formed a task force in June to combat a trend of credit union acquisitions of banks.
The group's new campaign comes a little more than 18 months after the Credit Union National Association launched its Open Your Eyes to a Credit Union campaign in an effort to boost the industry’s profile around the country.
“With credit unions posing so many risks to their members, the financial system and taxpayers nationwide, Washington needs to wake up and address the credit union industry gone rogue,” Preston Kennedy, president and CEO of the $240 million-asset Zachary Bancshares in Zachary, La., and the ICBA's current chairman, said in a press release.
If recent experience proves an accurate guide, the ICBA has its work cut out for it in targeting the tax exemption.
In January 2018, retiring Sen. Orrin Hatch, R-Utah, stunned Washington by questioning whether the credit union industry was “evolving in ways that take many credit unions further from their tax-exempt purpose,”
Banks followed Hatch’s missive with a flurry of activity, including an effort in Iowa
The ICBA also reiterated criticism of the NCUA for what it claims was
“With credit unions abandoning their founding mission in the name of expansion and risky lending, it is long past time for Congress to level the playing field between community banks and credit unions while reining in the National Credit Union Administration’s expand-at-all-costs agenda,” ICBA President and Chief Executive Rebeca Romero Rainey said Monday.
