America’s Independent Community Bankers on Thursday once again called on members of Congress to hold hearings on community bank acquisitions by credit unions.
The group’s request follows an announcement that VyStar Credit Union in Jacksonville, Fla., had agreed to buy Heritage Southeast Bank, with $ 1.6 billion in assets in Jonesboro, Ga., Would be the largest bank to ever be sold to a credit union, and the deal would give VyStar a foothold in the Atlanta area.
“While community banks accounted for over 60% of Paycheck Protection Program loans to lead the economic response to the pandemic, outdated credit union tax exemption and flawed supervision by the National Credit Union Administration call for another one of these essential local institutions, ”said the President of ICBA. and CEO Rebeca Romero Rainey said in a press release.
“The current wave of taxpayer-funded credit union acquisitions is exacerbating industry consolidation, reducing state and local government tax revenues, limiting the scope of the community reinvestment law, and again showing that Tax-exempt credit unions have become virtually indistinguishable from tax-paying commercial banks, ”she said.
Along with its request for congressional hearings, the ICBA asked the Government Accountability Office to commission a study “on the evolution of the credit union sector and [NCUA] surveillance. “
While credit union groups did not respond directly to the association’s requests, they did bring up the subject recently. In one Letter of March 26 On members of the Senate Finance Committee and House Ways and Means Committee, the National Association of Federally Insured Credit Unions has rebuffed bankers’ arguments, suggesting that the ICBA is looking to resolve a problem. that does not exist.
“It’s important to recognize that bank-credit union mergers are voluntary market-based transactions that require the board of directors of a community bank to vote on the sale to a credit union. These are not “hostile” takeovers, ”wrote Brad Thaler, NAFCU vice president of legislative affairs.
“The bank is the one that ultimately makes the decision to sell and merge with a credit union,” Thaler added. “Perhaps the concerns of the ICBA would be better addressed by sending a letter to their members asking them why they choose credit unions. Over banks.”
This isn’t the first time the ICBA has called for these hearings, and there’s little reason to believe lawmakers would be more responsive this time around.
Several pieces of legislation have been tabled in recent weeks to improve the operating environment for credit unions, including a bill that make it easier for credit unions to kick out disruptive or abusive members. Another bill, introduced in March, would provide some credit unions with reduced limits on commercial loans.