GreenState Credit Union of North Liberty, formerly University of Iowa Community Credit Union, has entered into an agreement to buy seven branches of First American Bank of Fort Dodge.
The deal, which is subject to regulatory approval, is expected to close fourth quarter this year.
First American is selling branches to three institutions, including two that are not named in a news release.
The purchase represents 10,000 new members for GreenState as well as about $200 million in loans and $500 million in deposits.
GreenState has $5.5 billion in assets and 200,000 members.
Jeff Disterhoft, GreenState president and CEO, said the new branches in Fort Dodge and greater Des Moines will provide added convenience for existing customers of GreenState.
The Iowa Bankers Association, however, responded to the announcement saying Iowa taxpayers will lose while Iowa’s largest credit union will profit.
“Iowans have just been handed another tax bill as a large tax-exempt credit union in Iowa has announced its purchase of a taxpaying bank,” IBA President and CEO John Sorensen said in a statement. “The credit union will engage in all the same activities as the bank, including making a profit. It just won’t have to pay state or federal income taxes on those profits like the bank did.
“While this is great for the credit union, it’s bad for Iowa taxpayers who are subsidizing the purchase.”
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GreenState, while not addressing Sorensen’s comments, said credit unions have acquired bank branches in other states and the purchase of First American’s branches keeps those assets in the state.
University of Iowa Community Credit Union changed its name to GreenState Credit Union after Iowa lawmakers last year passed legislation forbidding credit unions from including the name of any public state university in their name.