WASHINGTON– The Independent Community bankers of America (ICBA) is hailing a decision by the Colorado Banking Board to reject a plan by a Colorado Credit Union to buy a bank, and calling on other states to do the same.
As CUToday.info reported here, the board found that the deal—in which Boulder, Colorado-based Elevations Credit Union would purchase the assets of Cache Bank and Trust, headquartered in Greeley—did not meet the requirements of state law.
The ICBA has said it will be emphasizing in the 2020 Congress and at the state level the issue of credit union acquisitions of banks.
"ICBA and the nation's community banks commend the Colorado Banking Board for blocking the purchase of a tax-paying community bank by a tax-exempt credit union. In a nearly unanimous vote, the board found that the transaction would have violated Colorado statutory requirements,” said ICBA CEO Rebeca Romero Rainey. Following this landmark decision, ICBA calls on other state agencies to examine their banking statutes to determine whether it is legal and in the best interest of their state to allow state credit unions to buy the assets of state-chartered banks. The recent surge in credit union acquisitions of community banks worsens banking industry consolidation, reduces tax revenues for local communities, and furthers the credit union industry's unbridled encroachment into full-service banking.
‘Raising the Red Flag’
“ICBA will continue to raise a red flag on the disturbing trend of larger credit unions increasing their taxpayer-subsidized footprint by buying up smaller, tax-paying community banks,” Romero Rainey continued.
In a statement she cited a Credit Union Task Force the organization has created as well as its “Wake Up” campaign, in which it said it is encouraging federal and state policymakers to “re-examine the credit union industry’s tax and regulatory subsidies and to open their eyes to these financial firms' risky practices and irresponsibly lax oversight."