In the face of an insurmountable regulatory backlash, the Greenstate Credit Union in North Liberty, Iowa, has quit Planning to buy a bank in Nebraska,
Jeff Disterhoft, CEO of the $10.6 billion credit union, said Friday that a Nebraska judge supported the state’s regulatory opposition to the takeover of Omaha’s Premier Bank, effectively ending the deal.
“Of course we are disappointed,” said Disterhoft in an interview.
It was the second time this year that a deal in which a credit union bought a bank was canceled. $13 billion VyStar Credit Union in Jacksonville, Florida Heritage signs $196 million deal to acquire Southeast Bank June in Jonesboro, Georgia. The $1.7 billion legacy would have been the largest bank sold to a credit union.
VyStar deal closed three times delayed As companies struggled to get approval from state and federal regulators. The boards of directors of VyStar and Heritage said “all necessary regulatory approvals are not being obtained in a timely manner” as they threw in the towel.
Greenstate last year agreed to buy Premier Bank assets for $365 million. However, in December, the Nebraska Department of Banking and Finance Proposed deal rejected, which ruled that the Prime Minister had failed to provide evidence of the validity of the takeover. Lancaster County District Court Judge Ryan Post supported the decision.
In a nutshell, banking industry advocates have long argued that many credit unions have strayed from their original mission of serving those of modest means in limited geographic areas. Credit unions receive tax exemptions as a result of this mission, and critics say that when they buy banks, they effectively become tax-exempt banks and play an unfair game with tax-paying lenders. make the field.
In addition, America’s independent community bankers have against mugging These deals, which argue that credit unions aren’t taxed, are able to pay a premium for acquisitions that bank buyers can’t match.
The ICBA has asked Congress to hold a hearing and asked the Government Accountability Office to study the long-term impact of banks’ credit union purchases.
even then Trend towards buying banks by credit unions It is close to the national record level. So far this year, 10 such deals have been announced. Last year, 13 banks agreed to sell to credit unions, according to data from American Banker, nearing a record 16 such announcements in 2019.
This year’s deals included Greenstate’s purchase of Midwest Community Bank’s property in Freeport, Illinois for $327 million. That deal was finalized in July.
Disterhoft said Greenstate will continue to consider bank acquisitions outside of Nebraska while potentially systematically expanding into Omaha.
“Omaha is a growing market and an attractive location,” he said. “Organic expansion is possible… and we will respond to acquisition opportunities as they arise.”
Disterhoft said that while Nebraska has pushed back, most states appear to remain favorable areas for credit union-bank business.
“Each state has its own approach,” he said. Regulatory pushback is “not a nationwide movement”.