WASHINGTON—In response to a recent call by a bank trade group for congressional hearings on CU acquisitions of banks, CUNA has sent a letter to all 535 congressional offices saying such purchases help keep locally owned financial institutions in communities.
As CUToday.info reported here, the Independent Community Bankers of America (ICBA) is again calling on Congress to hold hearings to investigate the growing practice of credit unions buying banks following the announcement VyStar Credit Union in Jacksonville is buying a $1.6-billion bank in the Peach State.
In the letter to Congress, CUNA Chief Advocacy Officer Ryan Donovan said it’s more important than ever that communities retain access to a local financial partner that can meet their needs. He added credit unions are eager to be that partner, “which is why they’ve been there for some bankers when they’ve been ready to exit the market,” he wrote.
Donovan further stated that, despite banker complaints over bank sales to credit unions, the increasing closures have to led to more financial deserts in urban and rural communities across America.
Points Made
Other points made by Donovan in the letter:
- 80% of bank/credit union transactions have involved low-income designated credit unions, ensuring that consumers most affected by banking deserts retain access to a local financial institution
- Bank/credit union transactions account for only 0.3% of all bank assets sold since 2012. Furthermore, credit unions only account for $1.9 trillion in all financial assets, while the four largest banks individually each hold more in assets
- Since 2004, 86 banking deserts have been created by the net shuttering of nearly 6,000 bank branches. In the same period, credit unions have opened a net 1,600+ branches. Many community banks rushing to cash out their portfolios turn to credit unions to ensure their communities are served by a local financial services partner, reporting employee and branch retention among the top factors in the decision
- Credit unions paid nearly $25 billion in local, state, and federal taxes last year. “Meanwhile, bankers continue to celebrate a $30 billion annual tax break on investor profits.”
- Credit unions returned $12.9 billion in earnings to members last year through their people-over-profit structure