President and CEO Brad Bolton — Community Spirit Bank, Red Bay, Ala. — and attorney Mike Bell — Partner, Honigman LLP, Detroit — recently discussed the merger and acquisition activity of banks and credit unions with Travillian Head of Banking and Fintech, Brian Love.
Watch how financial institutions’ M&A deals spark debate about tax-exempt status:
Credit Union & Bank Mergers and Acquisition Tax & Regulatory Hurdles
Bolton and Bell specifically debated over the tax-exempt status and regulatory implications inherent in these deals.
Regulatory Disparity: A Level Playing Field for Banks and Credit Unions?
The in-depth discussion resulted in insights that include the following:
- Credit unions do pay taxes, a fact that challenges the notion of complete tax exemption for these financial services providers
- IRS provisions play a significant role in determining tax payments in credit union acquisitions of banks.
- A more comprehensive understanding of the tax implications in M&A deals is crucial for fair assessments.
- Discrepancies in regulatory burdens between banks and credit unions highlight the need for a level playing field.
- Emphasis on cybersecurity regulation underscores the importance of safeguarding financial institutions.
- Calls for equal treatment among all financial institutions reflect the push for fairness and accountability in the industry.
