New ICBA Analysis: Sharp Decreases in Small-Business, Mortgage Lending Follow Taxpayer-Subsidized Credit Union Acquisitions of Community Banks

Washington, D.C. (Sept. 9, 2025) - The Independent Community Bankers of America (ICBA) today released the results of a new data analysis demonstrating that the growth of tax-exempt credit unions acquiring tax-paying community banks is harming small businesses and local communities while community banks outperform credit unions in high-poverty areas.

In a new blog post, ICBA President and CEO Rebeca Romero Rainey details ICBA's analysis of publicly available data that shows:

• Since 2010, credit unions have acquired 77 community banks with less than $50 billion in assets-with more than 60% of these charter acquisitions occurring in the past five years.

• More than 80% of these acquisitions involved a credit union with more than $1 billion in assets, while more than 40% involved a credit union headquartered in a different state than the acquired bank.

• Community banks have provided roughly 69.3% of Small Business Administration loans provided by banks and credit unions since 2010, compared to 2.8% from credit unions.

• Community bank lending has also been disproportionately higher in the highest-poverty counties, with community banks accounting for 76.5% of SBA lending since 2010, compared with just 1.8% from credit unions-showing community banks are dramatically outperforming credit unions in the lower-income communities that credit unions receive a federal tax exemption to serve.

• In areas where community banks participated in SBA lending programs, SBA lending fell after nearly 80% of credit union acquisitions.

• Total mortgage applications decreased in 57% of affected service areas following an acquisition, while the amount loaned per approved mortgage application decreased in 61% of acquisitions and mortgage denial rates increased in 61% of acquisitions.

• Since 2010, community banks issued nearly 25 times more SBA 7(a) and 504 loans than credit unions, with community banks supporting nearly 6 million jobs compared to the 295,000 jobs supported by credit unions.

• In the top 25% highest-poverty U.S. counties, community bank loans supported 433,227 jobs compared to just 16,415 jobs supported by credit unions, despite credit unions' federal tax exemption.

"While ICBA and community bankers have been strenuously raising the red flag on the concerning trend of taxpayer-subsidized acquisitions of local financial institutions, the data in our new analysis should serve as a wake-up call to policymakers given the harmful impact of these deals on small businesses, consumers, and local communities-particularly in low-income areas," ICBA President and CEO Rebeca Romero Rainey said today. "With community banks disproportionately outperforming credit unions in meeting the needs of the high-poverty areas that the credit union industry receives a federal tax exemption to serve, the economic outlook for our nation's local communities depends on a much-needed change to federal credit union policy."

Following last year's record number of community bank acquisitions by tax-exempt credit unions, the continuation of this trend in 2025 has led to increased criticism of credit unions straying beyond their founding congressional mandate of serving people of modest means with a defined field of membership, such as those with the same church or employer. Media reports have focused on credit unions abandoning their mission with "Wall Street-style" behavior and increasingly acquiring community banks thousands of miles away, while ICBA polling conducted by Morning Consult earlier this year found 62% of U.S. adults support a congressional investigation of the credit union industry's tax and regulatory exemptions.

ICBA's "Repair, Reform, and Thrive" plan and open letter to the 119th Congress urge lawmakers to address credit union tax and regulatory advantages. Further, a 2025 ICBA policy resolution calls on policymakers to end the federal tax exemption for credit unions with $1 billion or more in assets or to establish tax parity between credit unions and community banks. ICBA looks forward to continuing to work with the Trump administration and the 119th Congress to advance these critical reforms.

Today's blog post is available on the ICBA website.

About ICBA
The Independent Community Bankers of America® has one mission: to create and promote an environment where community banks flourish. We power the potential of the nation's community banks through effective advocacy, education, and innovation.

As local and trusted sources of credit, America's community banks leverage their relationship-based business model and innovative offerings to channel deposits into the neighborhoods they serve, creating jobs, fostering economic prosperity, and fueling their customers' financial goals and dreams. For more information, visit ICBA's website at icba.org.