Credit Union and Bank Mergers
Credit unions seek every opportunity to serve their 131 million members by providing safe and affordable financial products and services. Part of these efforts include making sure local communities continue to have access to these products and services when local banks choose to merge with a credit union.
Banking trade groups have attacked credit union-bank mergers, spouting false claims about this not-at-all new practice, using meritless arguments to attack credit unions. The truth is, banks are trying to avoid the reality that they have closed nearly 200 branches per month over the last two years, creating banking deserts in areas where Americans need financial institutions the most. Keeping credit unions from merging with banks and servicing these areas is both hypocritical and detrimental to the financial stability of many families and small businesses.
We strongly reject banker propaganda littered with inaccuracies and misrepresented facts regarding credit union and bank mergers. NAFCU consistently educates Congress on the facts: bank-credit union mergers are voluntary, market-based transactions that require a community bank’s board of directors to vote on merging with a credit union. Unlike what bankers suggest, these are not ‘hostile’ takeovers; the bank is the one that ultimately makes the decision to sell to, and merge with, a credit union. In many instances, a bank must choose between merging with a credit union to sustain a trusted local financial institution for their community or closing their doors completely and leaving a gap in banking services. A merger means that the branch remains open, retaining property taxes, payroll taxes, and economic income generated by keeping jobs in the community.
How This Impacts You
Credit union-bank mergers represent a small percentage of overall mergers within the financial services sector, accounting for just over three percent of total bank mergers in 2021. These mergers are typically a win-win for local communities that may lose their local financial services branch and lose a trusted source of financial services as well as remove job opportunities for employees. Credit union-community bank mergers often mean employees retain jobs and branches remain open without dropping services while maintaining a strong focus on the members in the community. NAFCU data shows that credit unions generate $12 billion in economic benefits each year.
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