Lucas White’s Viewpoint column [Credit unions have unfair advantage over banks, Sept. 4] complained about instances where community banks have chosen to sell their assets to credit unions. It is nothing new for banks to want to limit options in the marketplace regarding credit unions because constraining credit union growth would reduce competition, and increase bank profits, with consumers losing if that were to occur. The 2.6 million Hoosiers who belong to Indiana’s credit unions benefit by $200 million in total each year through better rates and lower fees at credit unions compared to if their only choice was going to banks for those services. Credit unions are locally rooted in their communities, with America’s credit unions adding 1,600 branch locations between 2004-2018 when banks were closing 1,700. So, consumers and communities benefit when a community bank decides to sell its assets to a credit union, especially compared to when a local bank is acquired by a large out-of-state headquartered bank.
Based on national data, when a bank decides to be acquired by a credit union, more branches remain open, more employees are retained, and the quality service credit unions are known for is offered. This benefits consumers of all income levels. For example, half of credit union mortgages go to borrowers earning middle incomes or less. Local businesses benefit, too, as Indiana credit unions that make business loans have made 4,200 Paycheck Protection Program loans since the pandemic began, which helped retain 32,700 Hoosier jobs.
Credit unions don’t pay federal income taxes because of their member-owned, not-for-profit, cooperative structure where they distribute earnings not needed for operations and reserves to members through better rates, lower fees and superior service. Taxes built into the purchase price of a bank being acquired by a credit union equates to what the bank would have paid in federal income taxes for more than the next decade on average.
National data shows that, between 2012 and 2019, banks have chosen to sell to credit unions only 2% of the time. When they do, their employees, customers, and communities all benefit.
President, Indiana Credit Union League