Credit Unions Continue to Buy Banks Despite Bank Lobby, Regulator Pushback

Regulators in a half dozen states have now thrown at least temporary roadblocks in front of credit unions’ efforts to buy community banks, but the deals continue on.

Michael Bell, an attorney with Honigman, said the pushback from states is not causing credit unions to think twice about buying banks, but potential sellers in some states are unsure if they are free to deal with a credit union, he said.

“There is no slowing effect on credit unions, however, there is confusion and questions being created for community banks,” he said. Credit unions, he said, have "full power and rights to do this, and they are pursuing it.”

Bell said he believes the bank lobbies are ultimately trying to find a way to tax credit unions.

But the net result, he said, is that state bank associations are being forced to pick winners and losers among their own rank and file. That’s because excluding credit unions as buyers leaves only other banks to fill the void.