Recently, an American Banker article spotlighted an emerging, though rare, shift: credit unions buying banks (
At first glance,
What the article didn't consider is that in the full picture, a majority of bank sales involve other banks as purchasers. More importantly, it failed to address the bigger questions: Why are community banks closing and what does that mean for the people they serve?
When a bank chooses to divest and sell, nearly all of the assets go to other banks. Between 2012 and January 2025, a total of 2,499 banks were purchased by other banks. In contrast, over the same period, only 100 bank sales involved a credit union.
Nationally, 67% of bank assets sold go to out-of-state banks. In states like Oregon and Washington, that number gets closer to 90%. That often comes with branch closures, staff layoffs and a reduced focus on local communities.
Simply put, going from 0 to anything, like in this case, a handful of sales to a few, can be manipulated to appear like a "major" increase. It's not credit unions buying banks, it's other banks.
Each community bank has its own reason and story for why it's selling. But all of them come against a backdrop that show large Wall Street banks getting bigger, unprecedented options from venture-capital backed fintechs and nonbank lenders, a challenging regulatory environment, COVID-impacts to commercial real estate, and volatile stock prices after the
Small community banks' share of the market has steadily declined, while the share for credit unions has grown modestly. Meanwhile, large national banks have continued to dominate the financial services ecosystem, all while more money is moving every day into untested products.
The Indiana credit union, which was rebranded from Teachers Credit Union in 2023, says it chose Creatio for the low-code/no-code vendor's ease of use.
Community banks are increasingly squeezed, carrying heavier burdens while being told that credit unions are the problem. In reality, it's the trillion-dollar megabanks and their shareholders who benefit, vacuuming up market share and leaving smaller institutions to shoulder the weight.
While a solution may be to sell to an out-of-state bank that may strip the bank for profits without worrying about the impact to those that rely on its services, a seller may want to protect their staff, customers and the community.
In every bank merger and acquisition, profit is the priority, so the boardroom is focusing on how much they can extract from a community instead of add to it. People's jobs, lives and community needs don't factor into profits for shareholders on Wall Street.
Over the past 13 years, banks have closed more than 20,000 branches across the country, while credit unions have added more than 500. That's roughly 4 bank branches lost every day for 13 years, while credit unions filled the void and continued serving American communities left by banks.
All of this tells us about priorities.
Credit unions that purchase banks are more likely to keep the bank's existing branches open, protect employees' jobs and maintain a community-focused approach. They provide a valuable option that gives communities a fighting chance at retaining local services. Community banks choose to sell to a credit union to help working families retain financial services that exist solely to meet their needs.
Credit unions aren't structured for profit. Credit unions don't prioritize Wall Street shareholders and how much money they can make off a home loan. They prioritize Main Street America and members' ability to live their life. At a credit union, members aren't just money or an account number, they are the foundation and purpose for the mission. Credit unions are structured for members and communities to thrive.
It's disappointing when some choose to frame a community bank selling to a credit union as problematic. The bigger question that should be investigated is why small local banks are selling in the first place as large mega-banks continue to dominate the financial services landscape.
Credit unions offer real value to communities. And when they buy a community bank, it's not about acquiring assets, it's continuing a legacy, investing in people, and serving members with a mission-driven, community-focused approach.
