On January 15, I wrote that a bill was introduced in Virginia that would create a two way street allowing state chartered credit unions to merge with banks and state banks to merge with state or federal credit unions.
The Virginia Credit Union League has come out in opposition to the bill. The League believes the bill fails to protect members' rights and doesn't address a number of complex issues related to the merger, consolidation, or acquisition of not-for-profit, member-owned credit unions.
The argument about protecting members’ rights is a red herring. There are ample protections for members, and members are more than capable of determining what is best for them financially. In fact, members voted down a proposed merger in Maine, because they decided it didn’t meet their needs.
What credit union managers are really terrified of is that members would accept a good tender offer for their equity stake in a credit union, and take the money and run.
If a credit union and bank want to merge, who cares? In a free market, there is no reason that banks and credit unions should be prevented from merging. Members of the credit union would still have to vote in favor of a merger, so they are responsible for protecting themselves.
ReplyDeleteI completely agree...because in a free market there is absolutely no way for super large, hundred-billion dollar banks to skew the facts, leaving members with an incorrect impression of what is "actually" going to happen, ending with the hundred-billion dollar bank making even more money at the expense of the member. That never happens! Or would members be better served with credit unions remaining under their NOT-FOR-PROFIT cooperative charter structure, where their member elected, voluntary Board of Directors and credit union managers actually make decisions based on what is best for the membership at large? This bill sounds like more ABA and Leggett capitalist propaganda, just another way for them to eliminate competition in the market place.
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