JACKSONVILLE, Ark.–Arkansas FCU here says a move by the state’s bankers to shut it out as a lender in a local development will cost the credit union $400,000 in income over the next six years.
As CUToday.info first reported here, Arkansas FCU had been part of a consortium of lenders pledging $17.5 million toward the Little Rock Technology Park, a 3.25-acre area around Main St. in downtown Little Rock.
The $1-billion Arkansas Federal was initially included among the lenders listed on an Aug. 7 letter of intent with Little Rock Technology Park Authority. In addition to AFCU, other lenders included Arvest Bank, Bear State Bank, First Security Bank, Simmons Bank and Centennial Bank.
But the banks complained to the Arkansas Bankers Association that AFCU should not be part of the consortium as it is exempt from federal taxation and the tech park is being funded in part by taxpayer dollars. As a result, Arkansas FCU was removed as a lender and two new banks, First Arkansas Bank & Trust and Relyance Bank, were added.
Arkansas Online reported that by the time a new letter of intent was signed by the Little Rock Technology Park Authority on Sept. 4, the deadline had passed for the credit union to make a competitive bid.
Arkansas Online said AFCU CEO Rodney Showmar cited the $400,000 figure after crunching numbers based on the interest rate charged over the life of the loan.
The credit union continues to want to be a lender to the project, according to Arkansas Online. A letter from the credit union’s attorney, Dick Downing, to Little Rock city directors called the move “foul play” and urged that the original letter of intent be honored.