ICBA Revives Call For Credit Union Form 990 Filing After Jackson Area FCU Scandal
By CU Today Staff —
WASHINGTON—The Independent Community Bankers of America is renewing its longstanding call for Congress and the Treasury Department to require federal credit unions to file IRS Form 990 information returns, arguing the alleged $95-million embezzlement at Jackson Area FCU demonstrates the need for greater transparency at tax-exempt institutions.
In a statement, ICBA President and CEO Rebeca Romero Rainey said the alleged fraud at the Mississippi credit union—which NCUA placed into conservatorship in May after uncovering what it described in court filings as years of unsafe and unsound practices—underscores what the banking industry has long characterized as a lack of public accountability for federally chartered credit unions. Former CEO Leigh Bridges has been accused by NCUA of embezzling an estimated $95 million over several years, allegations detailed in federal civil litigation that CUToday.info has reported extensively.
The banking trade group said the case strengthens its argument that federal credit unions should be required to file Form 990, the annual information return submitted by nearly all tax-exempt organizations. ICBA contends those filings would provide members, regulators, policymakers and the public with additional governance and financial disclosures while giving the Internal Revenue Service more information to evaluate whether tax-exempt organizations continue to satisfy the requirements for that status.
The latest appeal follows comments ICBA submitted to the Treasury Department's Form 990 Transparency Initiative, in which the association urged Treasury and the IRS to revisit the longstanding exemption that allows federal credit unions to avoid filing the returns. The organization has repeatedly argued that requiring Form 990 filings would improve transparency while increasing public confidence in tax-exempt institutions.
ICBA also linked the transparency debate to its broader campaign against the credit union tax exemption, pointing to recent research it commissioned concluding that credit union acquisitions of community banks harm local communities and asserting that community banks outperform credit unions in serving high-poverty areas. The group also cited polling it commissioned showing majorities of both Republican and Democratic respondents support ending the federal tax exemption for credit unions with more than $1 billion in assets.
Credit unions have consistently opposed efforts to require Form 990 filings or alter its federal tax exemption, arguing that federally insured credit unions already are subject to extensive supervision by NCUA, regular examinations, detailed quarterly financial reporting and numerous public disclosure requirements. The Jackson Area FCU case, however, has intensified scrutiny of credit union governance and oversight, with ICBA contending the alleged fraud illustrates why additional transparency requirements should be considered by policymakers.
Originally reported by CU Today.