Nearly three-quarters of bankers believe the U.S. is either already in a recession or will enter one within the next year, according to a new survey of 427 community bank executives conducted by fintech firm
Bankers surveyed cited tariffs, deteriorating credit quality and interest rate uncertainty as the top drivers of their concerns — revealing the ongoing anxiety among a group that has historically
"These are largely community bankers … who I would say … broadly speaking, are supportive of President Trump," said a spokesperson for Intrafi. "At the same time, they're like the front line of lenders for small businesses and for farmers … two sectors which are very sensitive to changes in import and export prices."
Only 27% of bank executives surveyed said they were not expecting a recession on the horizon. 73% of bankers believe the economy is already in a recession or will be within the next year. Of the pessimists, 24% of respondents predicted the downturn would occur in the next six months, 39% believed a recession was likely within the year and 10% said they thought the economy was already in a recession. Importantly, those who thought the U.S. is heading towards a recession were much more likely to list tariffs as one of their top economic concerns.
"I don't think I've ever seen tariffs rank anywhere as a major concern [in past surveys]," the IntraFi spokesperson said. "If tariffs do lead to higher prices and the Fed has to react to that, that's going to be a huge concern for bankers."
Although much of the banking industry rallied behind Trump in 2024 — hoping his return would bring regulatory relief and tax cuts for the wealthy — their ideological alignment with the GOP and partisan optimism have done little to calm mounting recession fears.
Bankers have good reason to worry, as President Donald Trump's sweeping tariffs have driven fears that the economy could be entering a prolonged period of depressed growth and high inflation — a condition known to economists as
The survey also demonstrated that the outlook for the banking industry has darkened considerably since the start of the year. Intrafi found that 24% more bankers now expect economic conditions to deteriorate compared to last quarter, while the share expecting improvement has dropped by 19%.
The survey also highlighted tension in bank-credit union dynamics. Despite a record number of banks being acquired by credit unions last year, a slight majority — 55% of respondents — say they would not sell to one, even if it meant rejecting the best offer.
"The number of banks that basically said, 'We would not sell to a credit union under any circumstance,' went up by about two points," the spokesperson said. "The acrimony is real."
In recent years, tension between banks and credit unions
Originally designed as nonprofit cooperatives serving members of modest means, credit unions now hold over $2 trillion in assets and have been acquiring tax-paying community banks at an increasing pace. Bankers argue this trend represents a form of "regulatory arbitrage," citing credit unions' tax-exempt status and exemption from certain regulations like the Community Reinvestment Act as unfair advantages. These concerns have reached Capitol Hill, with Rep. Claudia Tenney, R-N.Y., calling for a Congressional hearing on credit unions' tax status and the Independent Community Bankers of America demanding greater scrutiny of the industry.
Credit union leaders have pushed back on claims that they operate with fewer constraints, pointing out that they are regulated by the National Credit Union Administration and subject to their own set of obligations, including rate caps and membership restrictions. Still, critics — including consumer advocates — argue that many credit unions have strayed from their original mission and increasingly resemble for-profit banks. Despite these concerns, legislative efforts to change their tax-exempt status remains unlikely.
Even as debate over regulatory parity intensifies, 45% of surveyed bankers said they would sell their institution to whoever made the best offer — regardless of charter type. A spokesperson for Intrafi noted that while the split responses might reflect a philosophical divide, they more likely point to a practical mindset. Credit unions hoping to acquire banks, the spokesperson suggested, may simply need to offer more compelling deals.
"If someone comes in with a better offer but you like them less, are you really not going to take that offer?" the IntraFi spokesperson said.
