March 31, 2022
A former National Credit Union Administration official continued an ongoing series of blog posts raising concerns over credit union acquisitions of community banks.
Latest Post: In his latest post, Callahan & Associates co-founder and former NCUA Central Liquidity Fund President Chip Filson said:
Fear of missing out, or FOMO, is driving many credit unions to consider bank purchases.
Credit unions are buying banks at multiples of book value, or at prices much higher than recent market valuations.
These all-cash purchases provide little transparency for credit union members or analysts to evaluate how the decisions will succeed financially.
Prior Criticism: In previous blog posts, Filson has noted these transactions convert firms subject to market monitoring into private entities and exclude credit union member-owners.
ICBA Op-ed: ICBA Chairman Brad Bolton recently wrote in Business Alabama (free registration required) that each credit union purchase of a community bank expands the segment of the financial services sector exempt from taxation and the Community Reinvestment Act—and Congress should investigate.
LinkedIn Article: The op-ed follows a recent LinkedIn article from Bolton on the resurgence of these acquisitions and how they harm local economies, including underserved communities.
ICBA Campaign: Meanwhile, ICBA is running a digital campaign featuring a recently released ICBA video urging Americans to advocate congressional hearings on how credit unions are taxed and regulated.
Grassroots: Community bankers can continue urging Congress to hold hearings on the credit union tax exemption using a customizable message to lawmakers on ICBA’s Wake Up page and its Wake Up Messaging Playbook.