CUs Voice Opposition To Plan By ABA Chair's Bank
It didn't take long for CUNA to fire back at new American Bankers Association Chairman Harris Simmons, the president of Zions Bancorp in Salt Lake City and a long-time foe of credit unions.
In an unusual move, CUNA said last week both it and the Texas CU league filed a comment letter with the Federal Reserve Board opposing Zions' planned acquisition of Amegy Bancorp of Texas. In a gesture sure to add to the acrimony with the banker, the credit union representatives told the Fed they believe the $1.7-billion deal "will not have any beneficial effects on competition or on the markets to be served by the combined banking organization," two areas the Fed is required to consider when reviewing proposed banking mergers.
"CUNA and the League also conclude that the convenience and needs of the affected communities will not be served by Zions' acquisition of Amegy," the letter stated. "Finally, CUNA and the league also contend that the financial and managerial resources of the proposed acquisition do not support approval of the transaction."
The gesture, the first time CUNA has ever weighed in on a bank merger, was an obvious shot at Simmons, with it filed on Sept. 30, just two days after the Utah banker was officially named new chairman of the ABA. During his formal remarks at the ABA's annual convention in Palm Desert, Calif., Simmons made it clear the repeal of the credit union tax exemption will continue to be one of his top priorities during his two-year tenure as head of the leading banking lobby group (see related story, page 2).
CUNA General Counsel Eric Richard acknowledged CUNA filed the negative comment letter because of Simmons' role.
Simmons, of course, has a long history of warring with credit unions in Utah. He and his bank led the lobby to rein in field of membership rights for state-chartered credit unions, once among the most liberal in the country. Zions also led the unsuccessful lobbying effort to tax the largest state-chartered credit unions. Though the effort failed, it succeeded in forcing as many as 15 of the largest credit unions in Utah to flee the state charter for the tax-exempt shield of the federal charter.
Both outgoing CUNA Chairman Dick Ensweiler, president of the Texas league, and CUNA President Dan Mica acknowledged Simmons' ascension to the head of the ABA during CUNA's Annual General Meeting in San Francisco last month, both calling him the biggest emerging threat to credit unions.
Despite the CUNA letter, the Zions deal is almost certain to be approved by the federal regulators.