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WBA Continues Campaign to Limit Financial Freedom

Nov 07, 2022
By Brett Thompson
  • Advocacy
Last week, Settlers Bank announced plans to sell the bank in an open market transaction to Wings Financial Credit Union, a Minnesota based credit union. Settlers Bank Founder and CEO Tom Spitz explained the rationale for the sale:

"Settlers bank was started 15 years ago to be accessible and to build relationships through collaboration. Wings shares these values, and our partnership will allow us to build on our already strong market momentum."

Nonetheless, The Wisconsin Bankers Association in their statement on the transaction, continued to echo reckless claims regarding their members’ decision to sell to a credit union.

In reality, Wisconsin is not a hotbed for bank acquisitions because such sales are prohibited by the law in neighboring Minnesota and Iowa. Bank sales to credit unions have occurred in both states.

In reality, credit unions are not gobbling up banks. Over the last decade, banks purchased 97.1% of bank assets sold. 

In reality, decisions by banks to sell in a free market are not a threat to the end of the banking industry. Banks in Wisconsin enjoy 80% of the market in the state and continue to thrive. In the past, WBA has stated a bank’s decision to sell is “completely up to its ownership, directors, or shareholders.” We couldn’t agree more, and question why the WBA would suggest state government hinder future transactions that benefit bank shareholders, credit union members, and the communities served.     

In reality, credit unions are likely to retain former bank employees, keep branches open and maintain a community focus following the transaction. St. Louis Federal Reserve Senior Economist Andrew Meyer, in 2019, concluded “if they can retain enough of the employees and customers, these transactions have the potential to be a win for all the stakeholders involved.” 

In reality, as not-for-profit financial institutions charged with improving the social and economic status of their members, credit unions differ from banks making them a preferable financial partner for consumers, communities, and banks that choose to sell to them. The direct financial benefit citizens of this state receive by using a credit union--through better rates and fewer or lower fees ($420 million saved in 2021 alone)--is over six times the estimated tax revenue banks claim credit unions should pay. It is also worth noting that many Wisconsin banks pay no corporate income taxes due to their Subchapter S charter.

In reality, the WBA is out of touch with the interests of Wisconsin consumers. 71% of Wisconsin registered voters polled in August 2021 agree that if a community bank were to leave their community, they would want a credit union to take its place.

With their false claims debunked, the clear conclusion is that the WBA is working to limit financial freedom in Wisconsin, by restricting banking options for consumers and by banning sound business decisions for financial institutions.