WASHINGTON, D.C (May 13, 2025) |
Ahead of the House Financial Services Subcommittee’s May 15 hearing, “Merger Mayhem: Concentration and Competition in the Banking Sector,” the Defense Credit Union Council (DCUC) requested policymakers protect voluntary mergers between community banks and credit unions as a means to preserve local financial services and promote financial inclusion.
“As financial institutions continue to consolidate, many communities are left with fewer banking options,” says Jason Stverak, DCUC Chief Advocacy Officer. “Credit unions have increasingly stepped in to maintain local access to financial services—particularly in rural, underserved, and military communities, by acquiring small banks seeking partners aligned with community values.”
DCUC shared that these mergers are initiated by willing sellers, approved by bank boards, and conducted under full regulatory oversight. Unlike hostile takeovers, these transactions are often the only alternative to branch closures, helping retain local jobs and economic activity.
DCUC’s letter outlined several key benefits of credit union acquisitions of banks, including preserving local access (more than 70% of credit union branches are in low- and moderate income areas), rural and military outreach, and community investment (mergers protect jobs, sustain tax revenues, and strengthen financial inclusion).
Stverak noted that since 2012, less than 0.3% of all banking assets merged have involved credit union acquisitions — a small fraction compared to more than 2,000 bank-to-bank mergers during the same period. In contrast to the 19,301 net bank branch closures from 2012 to 2023, credit unions opened 1,373 new branches — underscoring their growing role in filling service gaps.
"Proposals to block these mergers are being driven by special interests, not by community needs,” adds Stverak. “Preventing a sale to a credit union doesn’t keep a bank open — it just removes a vital option that helps communities retain financial access.”
DCUC cited recent efforts in Colorado and Tennessee to restrict such transactions, warning these policies only exacerbate banking deserts. “As the GoWest Credit Union Association noted during Colorado’s debate, “at a time when banks in Colorado and nationally continue to close branches and reduce people’s access to financial services, there must be an option for banks to sell to credit unions that are simultaneously opening branches to ensure local financial access for all”. We strongly echo this sentiment…allowing these voluntary sales gives communities a fighting chance to retain a hometown financial partner,” the letter read.
DCUC calls on Congress to avoid imposing legislative or regulatory barriers that would limit banks’ ability to merge with credit unions. “These transactions are safe, sound, and aligned with credit unions’ mission to serve people of modest means — including military families who rely on them for affordable financial services,” says Anthony Hernandez, DCUC President/CEO. “Credit union-bank mergers are not about market dominance — they’re about preserving access, sustaining communities, and reinforcing the not-for-profit mission that puts people before profit. We urge lawmakers to support this critical path for keeping financial services local.”
For more information, please contact Jason Stverak at jstverak@dcuc.org and visit dcuc.org/advocacy.