SNL Financial, a leading financial industry consultancy based inCharlottesville, Va., said Monday that credit unions buying banksas a way to fuel growth is a mini-trend.

SNL reported there were six instances of credit unions buyingbanks in recent years, with the most recent being the $406million FirstCommerce Credit Union's announcement Aug. 13 it will purchase the $89 million First National Bank. FirstCommerce is based in Tallahassee, Fla., and First National Bank inCrestview, Fla.

The firm quoted Michael Bell, an attorney at Howard &Howard, who provided consulting services for many of the purchases,as calling it a mini-trend.

“I call it a mini-trend, only because I don't think you aregoing to see a thousand of them, but I think you might see ahundred,” SNL quoted Bell as saying. “This is a legitimate, viablestrategy for growth for credit unions, no question about it. Ithink there are forces inside the credit union industry and outsidethe credit union industry that currently are aligned that makethese transactions palatable.”

He also told the firm that he has another 10 similartransactions in the pipeline, in various states and of varioussizes, adding that size need not be a limiting factor in the sales.However, he and other sources argued that size of the purchaseddoes play a role, arguing that the banks purchased are so smallthey said they can't afford to keep up with increasing regulatoryburden.

SNL quoted Donald Musso, president and founder of FinPro Inc, aLiberty Corner, N.J.-based consulting firm to financialinstitutions, on this point.

“We are talking about an $80 million bank. If we layer oncompliance costs and regulation costs, it's going to make it nearlyimpossible for these guys to make money. If you are abillion-dollar bank, you can afford to hire a compliance officer.You can handle the regulations being thrown at you, but when youare a little $80 million bank, you can't afford to put all thoseresources on.”