The Wall Street Journal Reports on CUs' Bank Buying Spree

Credit unions buying banks have attracted the attention of The Wall Street Journal.

The story notes that while most credit union mergers are with other credit unions, credit unions have recently gone on a buying spree.

Since the beginning of 2018, credit unions have announced 21 banks deals. In comparison, there were only 12 deals announced during the prior five years.

In fact, this year a record number of deals have been announced.

Critics point out these "deals illustrate how competitive credit unions have become, given their tax advantages, lack of shareholders and diminishing constraints on growth."

Credit unions contend that these deals allows them to expand their footprint and product offerings. In addition, credit unions claim these acquisitions represent a good return on their investment.

Making news, National Credit Union Administration (NCUA) Chairman Rodney Hood told The Wall Street Journal that the agency plans to introduce a proposed rule later this year clarifying the regulatory responsibilities of credit unions when acquiring banks.

I will be interested in reading what NCUA proposes. Hopefully, the agency will remove many of the barriers that keep banks from acquiring credit unions.

Read the story (subscription required).