The CU2.0 Podcast

CU 2.0 Podcast Episode 65 John Weinkowitz on Credit Unions Buying Banks, Live from Finastra Community Markets

November 20, 2019 Robert McGarvey Season 2 Episode 65
The CU2.0 Podcast
CU 2.0 Podcast Episode 65 John Weinkowitz on Credit Unions Buying Banks, Live from Finastra Community Markets
Show Notes

Credit unions are buying so many banks the Wall Street Journal refers to this as a "spree."


Just in the first eight months of 2018 there were 21 transactions, compared to 12 in the prior five years, by the WSJ count.


What is going on here?


We put that question to John Weinkowitz, Head of Product Strategy, Community

Markets, Finastra, and himself an m and a expert.


Is this doing business with the devil?


Should this put into jeopardy the credit union tax exemption - as many bankers are insisting?


What drives the transactions? The need to grow, said Weinkowitz. FIs below a certain size find it more difficult to compete. So some put themselves up for sale.  And others go hunting for acquisition partners.


The allure for credit union execs is an immediate increase in members, deposits, and also - in many cases - branches.


But are they factoring in predictable attrition?


Do they have a strategy for employee retention - which may be critical to making an acquisition work?


Before buying a community bank listen to this podcast. You don't want to ignore that advice.


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