COLUMBUS, Ohio—One of the legal architects behind most of the nation’s credit union-bank acquisitions is sharply criticizing the Ohio Bankers League’s attempt to block Interra Credit Union’s proposed purchase of The Hicksville Bank, arguing the opposition is rooted more in politics than law or logic.
Michael Bell, partner and chair of the Financial Institutions Practice Group at Honigman, LLP, who has advised on more than 75 whole-bank transactions and numerous branch purchases across the nation, said the Ohio banking industry is ignoring existing legal pathways that already permit such transactions and overlooking precedent established both in Ohio and across the country.
Bell pointed to a 2019 Ohio transaction involving a credit union acquisition of bank branches, as well as longstanding approvals by federal banking regulators, including the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.
“Today there are OCC banks in Ohio that have this right and will remain having this right regardless of what the OBL does,” Bell said, adding that neighboring states including Michigan, Indiana and Kentucky have seen similar transactions for years.
“The key argument is essentially, ‘We don’t like credit unions,’” Bell said, contending the OBL has failed to identify any actual consumer, safety-and-soundness, or competitive harm tied to the proposed deal. Bell said the transaction would preserve branches, retain employees and continue serving communities, while giving bank shareholders the freedom to choose a buyer.
“That’s what people need to understand here,” Bell said. “The Ohio Bankers League is advocating against its very own community banks and asking the state to prevent its banks from having the voluntary choice and the power to decide who they’d like to sell to.”
As previously reported by CUToday.info, the Ohio Bankers League has vowed to use “all available tools,” including litigation, to challenge the proposed acquisition of the $225-million Hicksville Bank by $2-billion Interra Credit Union of Goshen, Ind. OBL argues Ohio statutes governing state-chartered bank acquisitions do not authorize credit unions to acquire banks and has framed the transaction as a pivotal test case with implications for taxation and competition.
Bell countered that Ohio law provides multiple avenues permitting such deals, including parity provisions aligning Ohio-chartered banks with national bank powers and statutes allowing banks to sell assets and transfer liabilities to credit unions. He warned that if Ohio lawmakers or regulators move to prohibit such transactions, the state would join only a “sharp minority” of states that have restricted community banks from voluntarily selling to credit unions.
“In the end, if you join the sharp minority, you are going to lower the value of every community bank in the state of Ohio,” Bell said, arguing the effort would interfere with free-market choice for bank shareholders and communities. I would like to believe that Ohio will choose the free market, will choose the American way, and allow its banks to have the same choice national banks and banks in a great majority of states have.”