A majority of community bankers say they wouldn’t sell their institution to a credit union, even one that offered the highest bid — underscoring the rivalry between the two industries at a time of rising consolidation.
Fifty-three percent of bankers said in a recent survey that they would not sell to a credit union, while 47% said they would take the best offer.
The findings suggest that many executives at smaller banks are troubled by the recent trend of credit unions scooping up banks across the U.S., arguably by paying premiums made possible because they are not taxed.
“The animosity between banks and credit unions is significant, and something policymakers should not underestimate,” said Paul Weinstein, a senior advisor at IntraFi Network, which conducted the survey.
The hostility among community bankers appears to be most intense in the Midwest. There, about 63% of bank executives surveyed said they would refuse a sale to a credit union — more than in any other region.
While it is likely that bankers’ feelings amid a real negotiation would differ from a hypothetical survey answer, the results still highlight a surprising level of acrimony, Weinstein said.
The Independent Community Bankers of America
So far this year, there have been
"When the rubber meets the road, I suspect the outcome would be different,” Weinstein said. “If a bank was put in a situation and had to sell, I believe the bank would take the best deal."
Chief executives, chief financial officers and presidents of 392 banks participated in the survey, conducted during the first two weeks of October.
The survey found that small-bank executives are not ready to follow the lead of
About 70% of those surveyed said they do not offer an alternative to traditional overdraft fees and don’t have plans to offer one, either.
Some analysts have said that small banks that rely heavily on overdraft fees for revenue
Consumer Financial Protection Bureau Director Rohit Chopra told the House Financial Services Committee on Wednesday that most of the overdraft fees paid in the U.S. are concentrated in a “relatively small sliver of borrowers” who pay very high amounts over a single year.
Chopra said the bureau will “closely monitor this market to make sure it is free of unfair and deceptive practices.”
In the past big banks have borne the brunt of criticism for overdraft fees, but that could soon change, Weinstein said.
"A lot of the small banks don’t see this as much of an issue, because it hasn’t been raised to them at the same level of intensity,” he said. "There is potentially more pressure to come from the administration."
About 42% of the bank executives who were surveyed expect the economy to improve either moderately or significantly over the next year, down from 57% who said so in a survey taken during the first quarter.
The rising pessimism could be due to ongoing supply chain issues, worries about lingering impacts from the COVID-19 pandemic and concerns about what may happen if the Federal Reserve decides to raise interest rates next year.
However, 90% of those surveyed said Fed Chair Jerome Powell should be renominated to lead the central bank when his term expires in February.
"Bankers want certainty,” Weinstein said. “They are a lot more comfortable with the idea of Powell than a new nominee.”
The support for Powell comes at a time when community bankers are unenthusiastic about the Fed's issuing its own digital currency, an idea that the central bank has been exploring during Powell’s tenure. Only 9% of survey respondents said the Fed should do so, while 31% were against the idea and 60% were unsure.
