Twenty credit unions
The trend highlights the difficulties banks are having finding merger partners in their markets and credit unions' desire to diversify into business lending and expand their footprints. Critics say credit unions have an unfair advantage in the M&A market due to their tax-exempt status.
Credit union-bank mergers accounted for nearly one-fifth of deal activity in the banking industry this year, calculated by American Banker using S&P Global data.
Eleven of the deals involved parties that shared
The biggest deal in terms of assets was Global Federal Credit Union and First Financial Northwest Bank, with combined assets totaling $13.3 billion.
The biggest industry news of 2024 was the Justice Department issuing a redlining order against Citadel Federal, the first of its kind against a credit union. Citadel Federal agreed to a $6.5 million deal to settle claims it engaged in discriminatory lending in the Philadelphia area.
Artificial intelligence, a major theme in 2024, percolated through the industry, with an AI-based lending marketplace provider using its algorithm to help credit unions make loans to prime borrowers.
In regulatory news, California Gov. Gavin Newsom signed measures designed to bolster consumer protection rules, which included restrictions on overdraft-related fees charged by credit unions. The law requires credit unions to give their customers notice to pay back declined transactions, instead of instantly charging them overdraft or nonsufficient funds fees. The legislation also prevents credit unions from charging overdraft or NSF fees that exceed $14, beginning Jan. 1, 2026.
Women made a splash, with American Banker naming the 15
Michigan credit union lands second bank deal in Florida
DFCU Financial made a bid for Winter Park National Bank in suburban Orlando, Florida, its second whole-bank deal in the state in as many years, as the Dearborn, Michigan-based credit union continued its build-out in the Sunshine State.
The all-cash bid for the $845-million asset Winter Park National would give DFCU two branches in central Florida, one each in the Orlando suburbs of Winter Park and Longwood, and a commercial loan book.
In 2023, the $6.6 billion-asset DFCU bought First Citrus Bancorporation in Tampa and acquired two branches from MidWestOne Financial Group — one in Naples and the other in Fort Myers.
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First-ever redline order against a credit union shocks industry
The Justice Department charged the $6 billion-asset Citadel Federal Credit Union, founded in 1937 to serve steelworkers, with avoiding lending in minority communities in and around Philadelphia. Following a three-year investigation, the two sides agreed to a consent order.
Prior to the order, the DOJ had never acted against a credit union for redlining. The revelation appeared to deliver a blow within an industry that takes pride in providing fair, equitable service to people of modest means as well as historically disadvantaged groups.
The 25-page order requires Citadel to create a $6 million subsidy fund aimed at increasing mortgage, home improvement and refinance loans in predominantly Black and Hispanic neighborhoods. It also requires Citadel to spend $270,000 on marketing and outreach and $250,000 on community partnerships, and also open three branches in minority communities.
Citadel CEO Bill Brown said the credit union "respectfully disagrees" with the DOJ's claims, insisting it had no intent to avoid lending in minority communities.
"Citadel's robust focus on our digital journey shifted our strategy away from new brick-and-mortar branches in recent years, which inadvertently impacted our ability to serve our region as broadly as we had planned," Brown said in a press release.
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Upstart expands to prime lending for partners like Alliant Credit Union
Upstart, an AI-based lending marketplace provider that traditionally served consumers who couldn't get credit elsewhere, is shifting its attention to the kinds of prime borrowers that banks embrace. It launched a program called T-Prime that will let bank and credit union partners target super prime borrowers, using Upstart's marketing channels and automated lending system.
A case in point is Alliant Credit Union, a Chicago-based, digital-only credit union that serves employees of large companies and association members across the country. The credit union, which has no branches, has been working with Upstart for about a year, offering debt consolidation loans to consumers who have racked up a lot of credit card debt.
"The aim Upstart now has to serve some of these more prime tiers is a strong overlap with our interest in serving and acquiring new members," Dennis Devine, president and chief executive officer of Alliant, told American Banker's Penny Crosman. "We generate new members, we generate deposits, but we also want to be effective at extending high-quality loans to our members. That's where a partner like Upstart can fit. And if they are focused on serving members that we're able to serve and extend credit to, the partnership becomes a pretty interesting one to us."
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New California laws cover credit unions' overdraft fees
California Gov. Gavin Newsom has signed a package of bills to bolster consumer protection rules in areas such as debt collection for small-business owners and overdraft-related fees charged by credit unions.
The Democratic governor signed legislation that requires credit unions to give their customers notice to pay back declined transactions, instead of instantly charging them overdraft or nonsufficient funds fees. NSF fees are similar to overdraft fees, with the difference being that they're charged when transactions get declined, as opposed to when they go through.
The legislation will also prevent credit unions from charging overdraft or NSF fees that exceed $14, beginning Jan. 1, 2026.
Many large banks have stopped charging NSF fees in recent years. But among the largest 20 U.S. credit unions, 80% still do, according to data from the Consumer Financial Protection Bureau. Four of those credit unions are based in California.
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How top female credit union execs tackle members' economic hardships
The crisis of the past few years has taken a financial toll as high prices and borrowing costs put businesses and consumers under pressure.
Credit unions have been dealt a particularly tough hand, given their focus on communities that often suffer more during tough times.
"In the past year, our credit union faced the challenge of supporting members during economic uncertainty, especially in low-income communities," Darlene Johnson, executive vice president and chief strategy and transformation officer at Suncoast Credit Union, told American Banker's John Adams. "Rising costs placed additional financial strain on our members, many of whom were already vulnerable."
Johnson and some of the other honorees discuss how their institutions are managing their businesses while helping their consumers.
Suncoast last year expanded affordable housing programs and enhanced access to low-cost loans that fund medical care and transportation.
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Inside Tanya Otsuka's historic NCUA role and regulatory vision
Tanya Otsuka's vision for public service was forged early, borne of her grandparents' experience with injustice. "They were actually both in prison as children during World War II, because they happened to be Japanese American, even though they were both born in the United States," she told American Banker's Ebrima Santos Sanneh.
More than 80 years later, Otsuka has made history as the first Asian American to join the National Credit Union Administration board. The appointment is the latest step in a career in financial regulation. With nearly a decade at the FDIC and key roles in financial regulation during the banking crises in 2008 and 2023, Otsuka has established a track record in consumer advocacy and financial stability.
With less than a year on the board, Otsuka has already begun to advocate for policies focused on maintaining the stability and resilience of credit unions. Her priorities include ensuring that the National Credit Union Share Insurance Fund remains robust, addressing risks associated with changing interest rates and safeguarding member assets. She supports strategic investments in staffing and resources, particularly for small and Minority Depository Institution credit unions, to enhance their capacity to serve underserved communities.
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