A Tennessee appellate court overturned a decision by the state’s banking regulator to block a credit union acquisition of a bank.

State Ruling: As reported by CU Today, the court rejected a decision by the Tennessee banking commissioner that found the transaction violated a state law barring bank acquisitions by entities that are not bank holding companies. The Court of Appeals of Tennessee ruled that the law does not prevent credit unions from acquiring a bank’s assets.

Background: Tennessee was one of several states to block credit union acquisitions of community banks. With credit union acquisitions of tax-paying community banks again ramping up in 2024, ICBA has continued its calls for federal policymakers to respond.

ICBA Response: In a recent post on X, ICBA President and CEO Rebeca Romero Rainey said the latest deals mean 20% of this year’s bank acquisitions are by tax-exempt credit unions. ICBA also recently called on congressional committees to convene a hearing on credit union lending practices and oversight following reports of discriminatory lending at Navy Federal Credit Union.

Eyes on Oversight: Attention to credit union policy continued to grow with last month’s Federal Reserve Bank of Atlanta report noting the National Credit Union Administration has no enforcement authority over third-party service providers. As ICBA has testified before Congress, it supports allowing the NCUA to directly examine and regulate credit union service organizations and other third-party providers, which has contributed to ICBA-supported legislation to grant the NCUA such authority.

More on Credit Unions: Amid ongoing credit union acquisitions of community banks and increased attention to credit union policy, ICBA: