In more ways than one, the purchase by the $1 billion Royal Credit Union of 11 branches of an ailing Wisconsin bank represents an extraordinary and very positive precedent for CUs.
That was a message Tuesday from Washington consultant Chip Filson, commenting and praising the completion June 28 of Royal's acquisition of the 11 Wisconsin branches plus $177 million in loans and deposits, from Madison-based AnchorBank. Final regulatory approval for the transaction came late last week from two banking agencies following on the heels of NCUA and state regulator OK.
"Over the years there have been lots of cases of credit unions buying individual bank branches or buildings but nothing of this magnitude and so to me this signifies an example of the torch being passed from big banks to credit unions as the critical providers of local finance," observed Filson, a former top NCUA executive and president of Callahan & Associates.
In Filson's view, the purchase also underscores "an endorsement by banking regulators" of the newfound CU role in many communities.
"I only wish that some of those credit unions which find themselves closing down branches to meet capital and expense constraints would now transfer them to another credit union able to take on or expand the franchise," said Filson.
Regardless, the Eau Claire, Wis. CU deserves credit for undertaking "such a positive event," which also underscores the role CUs are playing in becoming a key resource for consumers in local communities as banks step away, Filson said.