Merger Madness: Are credit union – bank mergers just plain wrong?
by Robert McGarvey
When a credit union buys a bank, has something terribly wrong happened? Listen to bankers and you will think the answer is a loud yes.
Even some credit union veterans agree.
But it is the bankers who right now are creating the loudest noises.
Are they right? Why are these mergers occuring at all?
First off, some perspective. In 2019 there were exactly 16 credit union-bank mergers. There were 271 bank-bank mergers.
And yet here is the Independent Community Bankers Association shouting that the Devil is at the door, or words to that frightened effect: “ICBA and the nation’s community banks are calling on Washington to stop pressing the snooze button and wake up to the risks of aggressive, growth-obsessed credit unions and the costs of their taxpayer-funded subsidies,” ICBA President and CEO Rebeca Romero Rainey said. “With credit unions abandoning their founding mission in the name of expansion and risky lending, it is long past time for Congress to level the playing field between community banks and credit unions while reining in the National Credit Union Administration’s expand-at-all-costs agenda.”
The ICBA also announced a Wake Up campaign to warn the public about the perceived dangers of the tax exempt status of credit unions.
And yet, in a conversation with Keith Leggett, longtime senior economist of the American Bankers Association, now retired but who still writes his Credit Union Watch column, Leggett told me that when a community bank does a deal with a credit union it is because the bank is out to get the best deal for its shareholders and when that is a credit union, so be it.