By Ray Birch
WASHINGTON—Credit union acquisitions of banks could slow in 2026 if the FDIC moves forward with a potential new rule targeting such deals.
According to multiple sources, Acting FDIC Chairman Travis Hill is weighing a proposal for release this fall that would both increase regulatory scrutiny of credit union/bank transactions and impose an “exit fee” on the agreements.
The banking lobby has long urged Congress to clamp down on these agreements, arguing they harm the communities served by selling banks and reduce federal tax revenue. The Independent Community Bankers of America has been the most outspoken critic, repeatedly calling for the exit fee.
A similar FDIC proposal floated last fall—later withdrawn—would have required expanded disclosures and additional information in CU–bank acquisition filings.
John McKechnie
“This rumor has been making the rounds on the Hill for a couple of weeks,” said Washington Credit Union advocate John McKechnie. “I’m told the Acting FDIC Chairman has met with visiting banking groups and floated the idea of doing new rules of the road regarding credit union/bank transactions. I’m not sure what reaction his idea has gotten—the bank lobby here in D.C. is probably ecstatic about any and all restrictions, but it would be a head-scratcher to see bankers themselves celebrating fewer options when it comes to selling their bank.”
Simply A Tax
Jason Stverak, DCUC chief advocacy officer, addressed the possibility of the FDIC proposal.
“The rumored FDIC move to slap new regulations or punitive ‘exit fees’ – read tax – on banks selling to credit unions is nothing short of a special-interest-fueled, ill-conceived attack on community-based finance – and the Defense Credit Union Council will fight it tooth and nail,” he said.
Jason Stverak
Stverak said DCUC will not stand by for any rule that penalizes these voluntary transactions or biases the merger review process against credit unions whose mission is to serve members.
“Credit unions are member-owned, not-for-profit cooperatives devoted to financial inclusion and community reinvestment – especially for people of modest means, like military veterans and their families who rely on them for affordable services,” Stverak said. “When a community bank chooses to partner with a credit union, it’s often the only lifeline that keeps a local branch from closing, preserves local jobs, and maintains access to fair financial services in neighborhoods that banks have abandoned. We’ve seen it from rural America to military base towns: credit unions step in where profit-driven banks pull out.
“Make no mistake: these mergers are initiated by willing sellers and conducted under full regulatory oversight, often as the only alternative to a shutdown,” continued Stverak. “Blocking a sale to a credit union won’t keep a bank open – it just removes a vital option that helps communities retain financial access. If the FDIC or any regulator tries to undermine these pro-consumer partnerships, they will face fierce opposition from DCUC. We refuse to let misguided policies threaten financial inclusion, community reinvestment, or our steadfast support for the military communities and veterans we serve.”
Check All The Facts
The pioneer of credit union purchases of banks, Michael Bell, said the FDIC needs to examine all of the facts.
Michael Bell
“There is great risk in making decision based only on one side of the story,” said Bell, who has been part of more than 75 whole-bank agreements plus additional bank branch purchases. “I have faith that governmental bodies want to make decisions based on a full set of facts. As an example, the idea of an exit fee is non-sensical and has no basis in the actual facts. Hundreds of millions of dollars in taxes have been generated by CU/bank transactions – the bank lobby isn’t talking about that. These transactions are taxable and the CU covers the payment of those taxes. The amount of taxes paid in these transactions have greatly exceeded any tax the selling bank has paid.”
CUToday.info requested comment from both the FDIC and ICBA, but neither responded by press time. If this FDIC regulation is proposed, it would have to go through the FDIC rulemaking process, which could take six-plus months and require majority approval of the five-member FDIC board.