WASHINGTON—In response to a letter from the Independent Community Bankers of America and “persistent attacks” by bankers, NAFCU President and CEO Dan Berger has sent a letter of his own to lawmakers in the House and Senate to “set the record straight” on credit union-bank mergers.
Berger sent the letter to members of the Senate Banking and House Financial Services Committees, the House and Senate Committees on Ways and Means, and the Senate Committee on Finance.
"First and foremost, it is important to recognize that bank-credit union mergers are voluntary, market-based transactions that require a community bank’s board of directors to vote on selling to a credit union," said Berger. "These are not ‘hostile’ takeovers."
Among other “facts” cited in the letter aimed at discrediting “erroneous claims” made by bankers, Berger pointed to:
- The NCUA Board's recently proposed rule relating to these types of transactions
- Credit union characteristics and the strict prohibitions and limits on powers set out in the Federal Credit Union Act
- The bank-level taxes that are paid when a credit union uses a purchase-and-assumption transaction to acquire a bank
Other Points Highlighted
Berger also highlighted what he said are the benefits that the transactions can have for local communities that are at risk of becoming underserved.
"Bank and credit union mergers are typically a win-win for a local community that may lose its community-focused financial services, or even local employees and branches, if a national bank buys the local community bank," wrote Berger. "Credit union-community bank mergers often mean employees retain jobs and branches remain open with a focus on the members in the community."