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Berger letter to lawmakers pushes back against community bankers
In response to a letter from the Independent Community Bankers of America and persistent attacks by bankers, NAFCU President and CEO Dan Berger wrote 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 banks’ board of directors to vote on selling to a credit union," said Berger. "These are not “hostile” takeovers."
In the letter sent Friday, Berger uses facts to discredit the erroneous claims made by bankers, including:
- 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; and
- the bank-level taxes that are paid when a credit union uses a purchase and assumption transaction to acquire a bank.
Berger also highlighted the benefits that these 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."
Late last week, NCUA Board Chairman Rodney Hood touched on the upsides of bank sales to credit unions and indicated that the agency is "taking steps to add clarity to the purchase and assumption process" in a new Credit Union Journal op-ed.
Additionally, Berger, in an American Banker op-ed, previously rebuked bank lobbyists for misleading the public with their criticisms of credit union-bank mergers.
NAFCU has been leading efforts to educate lawmakers, administration officials, and the public on the facts of these mergers and will continue its advocacy efforts to ensure that there is an environment in which credit unions can grow and thrive. See credit unions' benefits for yourself.