Banks continue to fight “old, settled battles” as America’s credit unions remain focused on improving members’ financial well-being, CUNA Chief Advocacy Officer Ryan Donovan wrote Friday in Morning Consult. Donovan notes that banks still continue to claim that banks deciding to sell to credit unions (which has happened 42 times, compared to 2,343 instances of banks purchasing banks) are impacting tax revenue.
“Outrage over these transactions ignores the real issues at hand: Too many consumers are hurting, too many lack convenient access to safe and affordable financial services and too many small financial institutions – banks and credit unions alike – have found it impossible to keep up with the cost and complexity of compliance with an ever-increasing regulatory burden flowing out of the Consumer Financial Protection Bureau and other regulators,” Donovan wrote.
“This forces the leaders of struggling banks to either close or to fulfill their fiduciary duty to shareholders by taking the best offer available – whether it comes from a megabank, local competitor or credit union,” he added.
He continues to note that bank-to-credit union sales represent the only transaction of their kind in which all stakeholders—bank customers, employees, shareholders, and credit union members—win.
“Acquiring credit unions almost always continue to operate the bank’s branches: The No. 1 reason why credit union CEOs agree to an acquisition is to expand their branch network and the geographic areas their credit union serves,” Donovan wrote. “Credit unions’ pro-consumer, pro-community approach is a stark contrast to recent trends in the banking sector, where banks closed more than 13,000 branches – 14 percent of all branches – between 2008 and 2020…
“Banking trade groups apparently want Congress and state legislatures to prevent their member banks from selling to credit unions – but doing so would have a fundamentally adverse impact on local communities and their access to financial services, hurt efforts to promote financial equity and undermine free-market forces in which shareholders receive the best return on investment,” he added.