Tennessee Court Issues Temporary Injunction Blocking Bank Sale to Credit Union

A Tennessee court today issued a temporary injunction blocking the sale of Memphis-based Financial Federal Bank, a subsidiary of FedCorp, to Orion Federal Credit Union. The Tennessee Department of Financial Institutions challenged the acquisition, claiming it is prohibited under the Tennessee Banking Act.

The Tennessee case is the latest example of a credit union acquisition of a community bank being challenged in court. Other such sales were previously blocked in Iowa and Colorado.