State regulator stops Iowa credit union's bank deal

GreenState Credit Union in North Liberty, Iowa, has been blocked from buying a bank. 

The Nebraska Department of Banking and Finance officially denied an application by the $8 billion-asset credit union to acquire the $395 million-asset Premier Bank in Omaha, Neb. The regulator said the bank failed to provide supporting evidence backing the deal’s legality. 

“Premier has not carried its burden of proof in this proceeding to show that there is express power under federal law for a national bank to sell substantially all of its assets under the factual circumstances presented in this proceeding,” the agency said in its Dec. 30 decision. 

The Nebraska Bankers Association had opposed the deal. 

GreenState also faced regulatory hurdles in 2019 when it was looking to finalize the purchase of branches from First American Bank in Fort Dodge, Iowa. The bank settled with the state’s regulator to complete the sale. 

The Nebraska regulator determined that Iowa-based GreenState failed to qualify as a “financial institution” that can pursue cross-industry transactions in Premier’s home state. GreenState said in a statement that it hopes to eventually close the deal. 

“The efforts made by the Nebraska Bankers Association are simply blocking consumer choice for Nebraskans," the credit union said in a prepared statement. "GreenState will create jobs, give back to the local community and put money back into the pockets of its Nebraska members.”

Premier plans to appeal the decision to state court.

Credit unions in other states have faced challenges buying banks. 

A judge in Tennessee granted a temporary injunction in November that blocked Orion Federal Credit Union’s proposed purchase of Financial Federal Bank in Memphis, Tenn. The Colorado Banking Board in 2020 blocked a bid by Elevations Credit Union to buy the assets of Cache Bank & Trust in Greeley, Colo.