The Independent Community Bankers of America (ICBA) and the Community Bankers Association of Georgia (CBA) are urging the FDIC to reject a proposed merger, saying it would lower regulatory safeguards for low- and moderate-income (LMI) consumers.
The acquisition in question is the purchase of Heritage Southeast Bank, based in Georgia, by VyStar Credit Union, based in Florida. The two banking organizations say the combined organization would be exempt from the Community Reinvestment Act. Also, they say it will result in branch consolidation in Georgia, further limiting access to financial services for LMI communities.
“With VyStar Credit Union seeking to leverage its tax exemption for the largest-ever credit union purchase of a taxpaying community bank, the FDIC should reject its application to roll back Community Reinvestment Act safeguards in affected communities,” ICBA President and CEO Rebeca Romero Rainey said. “The dated credit union tax exemption and faulty National Credit Union Administration oversight again threaten to claim another local institution while reducing loans and investments benefiting low- and moderate-income consumers.”
The leadership of ICBA and CBA outlined their concerns in a letter to the FDIC.
“The VyStar acquisition of Heritage Southeast Bank will substantially decrease Community Reinvestment Act loans and further branch consolidation in Georgia, harming low- and moderate-income consumers in our communities,” CBA President and CEO John McNair said. “We strongly urge the FDIC to reject this merger application.”
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