The $55 million Northwoods Credit Union of Cloquet, Minn., isjoining the list of credit unions buying bank branches and in this case the dealincludes deposits as well as the building.

“We are very exciting about this planned purchase which we arehoping can be completed by July 20 after we receive regulatoryapproval from NCUA and the FDIC,” said Barbara Brown,president/CEO.

The credit union is purchasing a branch of Duluth-based NorthShore Bank of Commerce located close by a Walmart store in Cloquet,a northeast Minnesota community of 12,000. Terms were notdisclosed.

Brown said the credit union had been making plans to build itsown branch near the same location when it made contact withmanagement of the $232 million North Shore about its interest inselling the branch the bank considered underperforming.

“We were a bit surprised but they liked the idea and we startednegotiations,” Brown said. She said the facility would be a goodfit for her credit union which had recently opted for a communitycharter.

Northwoods Credit Union had maintained its Cloquet office neara large paper mill and had won city approval to open the secondbranch on the other side of the city. Meanwhile, the bank's Cloquetbranch had been open eight years with 800 customers.

In considering the credit union/bank branch deal, the FDIC saidit will keep open a public comment period until June 4.

In media comments, the bank has said it intends to keep theloans from its Cloquet facility but sources said the credit unionmay eventually try to purchase those as well.