NY bankers seek regulatory ‘pause’ in credit union-bank merger

New York banking trade groups are asking the New York Department of Financial Services to “pause” the first-ever merger between a credit union and bank in the Empire State, in order to conduct an extensive investigation of the proposed deal.

In a letter last week, the presidents/CEOs of the New York Bankers Association and the Independent Bankers of New York State asked Adrienne Harris, superintendent of the New York Department of Financial Services, to delay the merger of Catskill Hudson Bank and the Hudson Valley Credit Union. Under the merger, announced in January, customers of the bank would become members of the credit union.

“We believe this acquisition warrants careful and transparent consideration and scrutiny due to the recent significant shifts within the credit union industry, particularly their unchecked expansion and continued exemption from most taxes and the Community Reinvestment Act,” Claire Cusack, head of the New York Bankers’ Association and John Witkowski, chief of the Independent Bankers of New York, wrote in their letter.

The two presidents/CEOs said they “strongly object” to the acquisition of a taxpaying bank by a largely non-tax-paying credit union. They said since the credit union is not subject to the CRA, they believe that the merged institution will be able to reduce their assistance to low- and moderate-income communities.

 

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