The Wisconsin Credit Union League is accusing the Wisconsin Bankers Association of trying to “mislead the public and policymakers” about a recently announced bank acquisition by a large credit union.
After Landmark Credit Union last week announced it would acquire American National Bank-Fox Cities in a deal that included $419 million in assets, the head of the WBA said taxpayers should be “urgently alarmed” about the acquisition.
Rose Oswald Poels, WBA’s president and CEO, said the move continues a national trend of community banks being bought by large tax-exempt credit unions. It’s the ninth such acquisition Wisconsin has seen, the group notes, and will bring Brookfield-based Landmark Credit Union to more than $8 billion in assets.
“Unlike banks, credit unions do not pay any state or federal income taxes,” Oswald Poels said in a statement. “Consequently, all of us tax-paying individuals and businesses will bear an increased tax burden to support needed government services.”
In response, the League yesterday slammed the WBA’s remarks as “dubious” and said the group aims to suppress credit unions and restrict financial choices for consumers.
“Lost in the WBA’s talking points is that banks organized as S-corporations also do not pay corporate income taxes,” the group said. “They conveniently ignore that the bank who decided to sell was, in fact, an S-corporation. Nor did they note that this was one of 36 bank sales since 2020 — 31 of which were bank-to-bank acquisitions.”
Those bank-to-bank deals involved $15 billion in assets, well above the less than $2 billion for bank-to-credit union deals, according to the League.
Still, WBA argues the mergers and acquisitions process is “clearly broken” and unfair due the tax advantages provided to credit unions. The group says more such deals are expected to happen this year, and is urging state and federal lawmakers to “stop ignoring this improper use” of the tax exemption for credit unions.
Oswald Poels says banks looking to purchase another bank submit “reasonable, competitive bids that are laughed at.” She claims the merger table no longer represents a free market process.
“No tax-paying bank has a fair opportunity to keep a tax-paying bank on the tax rolls with large, multi-billion dollar credit unions at the merger table offering ridiculous multiples to secure a deal,” she said.
Meanwhile, the head of Landmark Credit Union is hailing the deal as a way to expand its footprint in the region.
The credit union opened a loan production office in Appleton last year, and President and CEO Timothy Mackay said acquiring the Fox Cities bank presented a “strong opportunity to accelerate our growth” in northeastern Wisconsin.
