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A deal announced this week pushed the tally of U.S. bank-credit union mergers in 2024 to 13, keeping the year on a record pace.
Community banks
There were 11 credit union-bank deals announced last year. The
The $5.8 billion-asset
STCU, which in 2020 acquired four Umpqua Bank branches, said it expected to maintain Community Bank's 10 branches and retain all of its employees. The buyer anticipated closing the deal in early 2025.
"The proposed transaction is part of STCU's strategy to expand its footprint, diversify its assets, and add additional talent and expertise in each of the communities it serves," STCU
STCU has 39 branches across the Pacific Northwest.
"As the banking and business environment of our region grows increasingly competitive, this transaction with STCU will ensure expanded product offerings, more locations and a continued high level of service," Tom Moran, Community Bank's president and CEO, said in the release.
While CU-bank deals are increasingly common, the latest announcement followed a summer respite. Prior to this week, the last deal announced was in early June, when ELGA Credit Union in Michigan disclosed plans to
These types of combinations are controversial.
Bank trade groups note that credit unions are exempt from federal taxes so that they can cater to underserved markets or constituencies. When they buy banks, credit unions stray from that mission and effectively become banking companies while retaining their special tax status, critics say, creating an unfair playing field. Critics also argue that local communities lose tax revenue.
The Independent Community Bankers of America has called on Congress to hold hearings on acquisitive credit unions' tax status. The ICBA also requested a Government Accountability Office study on the credit union industry and has lobbied for an "exit fee" on CU-bank deals to recoup the value of the tax revenue lost once an acquired bank's business activity becomes tax-exempt.