Community and mutual bankers are asking the Office of the Comptroller of the Currency to delay consideration of a proposed Wings Financial Credit Union purchase of Brainerd Savings and Loan in Minnesota.
“Without careful consideration by the OCC of the pending transaction, which is expected to close by May 31, this transaction would have extremely negative consequences for the future of all federally chartered mutual banking organizations, their depositors, and the communities they serve,” Thomas Fraser, chairman of the Mutual Council of the Independent Community Bankers of America and Leonard Stekol, chairman of America’s Mutual Banks, wrote in a letter to the OCC this week.
Brainerd has one branch; when the merger is complete, the location will become a branch of Wings Financial and bank customers will become members of the credit union.
Established in 1938, Wings is Minnesota’s largest credit union. When the purchase was announced in January, Wings had more than $6.7 billion in assets, with more than 300,000 members.
Fraser and Stekol said that attempts to obtain needed documents under the Freedom of Information Act are stalled. They asked the OCC to pause regulatory consideration until the FOIA issues are resolved.
“We believe that upon further review the OCC will realize that Brainerd should not be liquidated, and a suitable mutual partner can be identified,” they said.
The banking officials said that federal law prohibits Brainerd and Wings from entering into a merger agreement, so the deal is being described as a sale of Brainerd’s branch.
“We question whether a full review of facts shielded from public view will reveal that the transaction is the functional equivalent of a merger and cannot be legally consummated,” they wrote.
The banking officials said that if the deal is approved, it could lead to mutual institutions becoming targets for credit union acquisitions.
“It is also puzzling why the OCC would adopt a policy that would encourage the transfer of taxpaying earning assets to tax exempt status,” they concluded.