by Robert McGarvey
When a credit union buys a community bank is that dancing with the devil?
Welcome to the CU2.0 podcast with your host Robert McGarvey. Today’s guest Keith Leggett, now retired Chief Economist with the American Bankers Association who still actively writes his blog, Credit Union Watch.
The topic of the talk: bank – credit union mergers.
Some banking experts are up in arms about these mergers. Not Leggett. He says community banks that are up for sale generally are looking for the best valuation and credit unions, in some cases, are exactly that as they seek to add new business capabilities – especially in business lending – and a fast route to that capability is buying the right community bank and retaining key staff.
On that note. listen to the CU 2.0 podcast with retired SECU CEO Jim Blaine, whose ideas are referenced by Leggett. We also discuss Maine Harvest, a new charter, and Leggett points to research on credit union bank mergers via Filene, also the St. Louis Fed.
Numbers to remember. In the past two years there have been around 400 bank – bank mergers. There have been around 20 bank – credit union deals.
Meantime, Leggett tempers his positive perspective on bank – credit union deals by saying there needs to be a two way street, that is, the regulator needs to lighten up about credit unions selling out to banks.
Why do bankers so often loudly scream about bank mergers with credit unions? A lot has to do with association politics, says Leggett, who adds that there’s always a stronger response when a wolf is said to be at the door.
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