ARLINGTON, Va.–While the most recent accusations and responses between banks and credit unions may sound and look familiar, the banking industry and its trade groups may have found a way to narrow the focus of their attacks, according to one person.
As CUToday.info reported, numerous banking industry trade groups have responded to the $1-billion acquisition of Heritage Southeast Bank in Georgia by Jacksonville’s VyStar Credit Union by calling it a “bad deal” for taxpayers and buy suggesting the move will hurt low-income consumers in the bank’s home
market.
The statements made by the banking groups in separate letters to Congress led to a response from NAFCU President & CEO Dan Berger, who said the letters “misrepresent” the facts and come with a big dollop of irony.
‘More Scrutiny’
In comments to CUToday.info, Carrie Hunt, EVP and general counsel with NAFCU, agreed the bankers’ statements sound like “more of the same,” but added, “the banks are trying to narrow the focus to prevent these (acquisitions). These are voluntary transactions where banks are choosing to sell to the credit unions. From our perspective, it’s best for the community and credit unions should have this flexibility.”
Still, the issue of credit unions buying banks, especially banks of more than $1 billion in assets, is likely to draw more attention on Capitol Hill, acknowledged Hunt.
“I do think there is more scrutiny from members of Congress as to why smaller institutions can’t survive and I think this plays into that,” said Hunt. “So, it’s not necessarily about why is a credit union buying a bank. It’s about why is it harder to charter new institutions? Why can’t some institutions survive in this market?”
CUNA Response
Ryan Donovan, CUNA’s chief advocacy officer, said also plans to send a letter this week related to “concerns raised by the banking trade associations around the small number of bank sales to credit unions.”