States weighing in on the matter of credit union purchases of banks

State lawmakers in Colorado are doing something that members of Congress have refused to do. They have said that credit unions cannot buy banks. State legislators in Tennessee have said the same thing. As you might expect, bankers are pleased. Credit union officials are not.

In recent months, the Colorado Legislature rejected a recommendation from the state’s Division of Regulatory Agencies that credit unions be permitted to purchase state banks. A Colorado House of Representatives banking bill contained a provision permitting such purchases, but the state Senate did not pass the proposal.

The GoWest Credit Union Association pushed hard for the House provision. “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,” the association wrote, in an issue brief.

The association added, “The option for a bank to decide to sell to a credit union would provide benefits to the bank as well as to the Coloradans who would be more likely to retain a community-focused financial institution relationship, in-person branch access, and local jobs.”


continue reading »