In a letter to Acting Comptroller of the Currency Blake Paulson this week, American Bankers Association President and CEO Rob Nichols raised concerns about recent attempts by credit unions to purchase federally chartered banks, including federal mutual savings associations. Nichols highlighted the “serious policy and legal issues that … could severely damage the mutual business model and deprive our mutual members’ customers and communities of its benefits.” These acquisitions may not comply with applicable law and may conflict with policies governing mutual institutions, including those of the OCC, Nichols said.
The OCC is authorized by Congress to adopt regulations for mergers of federal savings associations with other “savings associations,” however, Nichols outlined that it’s unclear that OCC has the power to provide a mechanism for the assets or liabilities of a federal savings association to be purchased by a credit union. Although the OCC can approve a liquidation of a federal savings association, “the distinction between its powers to prescribe regulations for mergers and to prescribe those for liquidations is significant,” Nichols wrote, adding that such distinctions may be motivation for credit unions to structure liquidated asset purchases as mergers.
Nichols asked that the OCC deny any application for credit union acquisition of federal mutual savings association assets and that it publicly disclose its policy analysis in making decisions on any such application.