In a new bank merger policy statement approved by the FDIC yesterday, the agency said that credit unions may need to provide additional information when applying to acquire an FDIC-insured institution as credit unions are not subject to the Community Reinvestment Act.
The American Bankers Association and state bankers associations have advocated for more scrutiny of credit union acquisitions of banks given the potential tax losses and effects on local communities. “FDIC should scrutinize bank merger applications involving credit unions to the highest extent possible,” ABA said in a June letter to the agency. “Without further analysis, the benefits these transactions provide bank customers, credit union members and the communities in which they operate remain yet to be determined.”
In the policy statement, the FDIC acknowledged that several commentators raised the issue. The agency rejected a request for a special analysis of the competitive effects of bank acquisitions by credit unions. However, it included language to consider the effects of nonbank competitors like credit unions when weighing merger applications.
The FDIC also noted that the CRA requires it to evaluate the credit needs of the communities the institutions serve when considering merger applications. Given credit unions are not subject to the CRA, “transactions involving a credit union may require additional information to evaluate the convenience and needs statutory factor,” the agency said.
