Bankers fight to hold back business capital because of "credit unions"

To the Editor,

As community bankers prepare for their fly-in to Washington, D.C, they're reinvigorating their tired complaints against credit unions.

As usual, their argument misses the mark. 

In an op-ed published earlier this week (Even amended, the Hagerty-Alsobrooks bill remains the wrong answer, April 27), community bankers took aim at the Hagerty-Alsobrooks deposit insurance reform bill, arguing that the effort to increase deposit insurance levels for certain non-transaction accounts — business payroll accounts — essentially providing parity for both banks and credit unions in deposit insurance, "gives credit unions a new government-backed opening into business." 

Their opposition to the legislation isn't that it increases the coverage level, nor that it's targeted at business accounts; their opposition stems solely from the fact that credit unions will be given the same deposit insurance coverage level as banks, keeping with long-standing federal practice of parity in deposit insurance coverage levels between types of institutions. They don't seem to care that the purpose of the bill is to protect worker payroll, enhance financial stability, and strengthen small and midsize businesses that drive economic growth in communities across the nation, many of whom are credit union members. 

Let that sink in. Community bankers are willing to fight against legislation that provides more certainty for small businesses, and maintains current federal practice, because it might allow credit unions to offer more affordable services and products.

Businesses have made clear credit unions are a partner they trust. The Fed's 2025 Small Business Credit Survey showed credit unions have the highest net satisfactions scores of any lender — 14 percentage points higher than small banks. That trust has been gained through years of relationship banking, and saying "yes" when other lenders said "no." 

If bankers claim their concern is about unfair advantages within deposit insurance structures, perhaps they would be open to reforms that require community banks to pay their fair share for FDIC coverage, similar to how credit unions pay evenly for their deposit insurance. 

But don't worry, there is an alternative they support: bringing back a relic from the 2008 financial crisis — the Transaction Account Guarantee, or TAG, program. This program was enacted to restore some stability and confidence in our nation's economy. The so-called merits of enacting this legislation over the deposit insurance reform bill is that it backs non-transaction accounts "but only on a temporary basis." 

America's Credit Unions supports both TAG and the Main Street Depositor Protection Act because they put American businesses first. Both bills target problems created by bank failures and mismanagement, not credit union abuses.

If ICBA and its members actually cared about the needs and concerns of American businesses, they would have a constructive, solution-focused conversation about what is best for Main Street businesses. They wouldn't waste their time fighting against policy proposals that help businesses and their employees because they include credit unions as part of the solution. 

That is the difference between cooperative finance and for-profit banks: Credit unions fight to create economic opportunity for the good of all; bankers fight to stifle it so only they benefit.