Thursday's announcement of the Baltimore-based $1.2 billion Municipal Employees Credit Union'sproposed acquisition of the $61 million Advance Bank in Baltimoreis yet another sign that the trend of credit unions buying banks isgaining traction.

Credit union attorney Michael Bell in Royal Oak, Mich., expectsthis trend will continue through this year and next, opening astrong opportunity for credit unions to grow.

“This is going to keep happening and it's going to accelerate,”Bell said this week, as more credit union executives become awarethat they can purchase banks.

He said some credit union executives are unaware they can buybanks, noting that in a recent presentation he made on this topicbefore 200 credit union executives, he estimated half were notaware they could purchase banks.

Richard S. Garabedian, a Washington attorney who specializes incredit union charter conversions, also said in an interview withCredit Union Times last month that the trend of creditunions acquiring banks is apparently gaining steam.

As proof, he pointed to recent transactions such as the $353GFA Federal Credit Union acquisition of the $83 million MonadnockCommunity Bank in Peterborough, N.H, the $1.3 billion UnitedFederal CU in Michigan purchase of Griffiths Savings Bank inIndiana, and the proposed $2 billion Landmark CU of New Berlin, Wis., acquisition of the $290million Hartford Savings Bank in Hartford, Wis., which secured NCUAapproval in March.

In addition, the $410 million Self-Help Federal Credit Union in Durham, N.C., purchased thefailed Second Federal Savings and Loan Association in Chicago inNovember. The bank, now named Second Federal Savings, officiallybecame a division of Self-Help FCU on Feb. 1.

Bell believes the pace of credit unions purchasing banks willpick up because NCUA is encouraging credit unions to pursue thesetransactions.

“We now have a friendly regulator when it comes to this, andthat is a big deal because these trends will ebb and flow,” saidBell, a former Credit Union Times Trailblazer 40 Below who isinvolved in the MECU transaction. He also was involved in theUnited FCU and the GFA FCU deals.

What's more, large banks, including super regional banks, arenot looking for acquisitions, opening opportunities for creditunions to approach small banks that are still viable but want toget out from under the burdens of regulations and compliance thatare making it increasingly more difficult for small financialinstitutions to compete, Bell said.

Most importantly, Bell said, he believes small banks are mostconcerned about their legacy when looking to merge with anotherfinancial institution.

“They don't want to be the ones that shut down branches or layoff employees,” Bell said. “The credit union model is different inthat they keep the branches open, hire most if not all of theemployees and become even more involved in the community.”