CUNA President/CEO Jim Nussle said banks are asking the government to place restrictions on other banks, which would interfere with their fiduciary duty to make decisions in the best interests of the bank’s shareholders.
In written testimony to the Senate Committee on Banking, Housing, and Urban Affairs for a Tuesday hearing on “Oversight of Regulators: Does our Financial System Work for Everyone?” Nussle asked the members to dismiss objections made by bank groups to banks who decide to sell their businesses or branches to credit unions. Nussle also said sales to credit unions are more likely to benefit the banks’ communities than sales to banks, especially large ones.
Banks collected $6.2 billion from 2012 through 2020 on 39 sales to credit unions, while collecting more than $2 trillion through more than 2,000 deals with other banks. CUNA derived the tally from research from the St. Louis Fed for 2012 through 2018 and updated it with data for the past two years.
In about 80% of these deals, banks chose to sell to low-income designated credit unions, where more than half of their members typically have incomes below 80% of the area median income.
“When a bank sells to a credit union, the community is the winner: a potential banking desert is prevented, and the community continues to receive locally provided financial services but now in the form of a member-owned credit union,” said Nussle.
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