Benefits and Challenges of A Bank Buying A CU

There has been a recent trend of credit unions buying banks; however, a bank buying a credit union remains very rare.

But in an article on the Credit Union Executive Society website, Steve Morrissette examines the value proposition of a bank acquiring a credit union.

The article discusses benefits for a bank buying a credit unions and the benefits to a credit union in selling to a bank.

For example, Morrissette writes that credit unions tend to hold core deposits and have an expertise in consumer banking. This would make them attractive to banks trying to deepen their retail banking operations.

Credit unions would benefit from selling to a bank because they would gain access to capital and business lending expertise.

The article noted that members would benefit from a one time special dividend, but also, from technology, especially mobile banking technology and cybersecurity.

However, Morrissette believes these acquisitions will remain rare. He points out the regulatory approval process can be daunting. Additionally, there is the potential for large attrition of members and employees.

Despite these concerns, this article is worth reading.

Read the article.