“We never had an inkling, not a clue, that there would be anything wrong with our being part of this project,” Showmar said. “It wasn't until our involvement became more public that we started to have a problem.”

According to Showmar and media accounts, the Tech Park Authority sought $17.5 million for the project, which would be used to purchase property and fund necessary renovations, demolitions and other professional services.

The five banks that, along with AFCU, sent a joint letter of intent on Aug. 7, 2015 to the Little Rock Tech Park Authority to begin negotiations on the loan were Centennial Bank, First Security Bank, Arvest Bank, Simmons First National Bank and up to two more banks that were not named, the letter said.

AFCU's problems started, Showmar said, after media outlets reported AFCU was among the financial institutions involved in the lending group. After the consortium sent its letter of intent to the authority, at the behest of the Arkansas Bankers Association, the group uninvited AFCU from participating in the deal.

In a statement about its actions, the ABA challenged AFCU's field of membership and tax-exempt status as it relates to the project.

“Our request was to see if there was a possibility of replacing AFCU with one or more Arkansas banks that wished to participate in the loan package,” the ABA wrote in a statement.

“The request was made because some of our membership had read the article and asked, rightfully so, how the Little Rock Tech Park Authority could be a member of the AFCU,” the ABA wrote. “Congress granted credit unions a tax exemption so that they could meet the credit needs of people of modest means with a common bond. Credit unions were based on a simple concept, common bond, where members were from the same church, school, employer or even small community. The Tech Park is a stretch, well beyond that intent.”

The ABA continued, “Also, we felt that since the Tech Park Authority is using sales tax revenues to acquire the initial properties, and that there is a nine or 10 year commitment for additional tax revenue use to help support the Tech Park, it makes sense to have taxpaying Arkansas banks involved in the financing. Arkansas banks paid $258-plus million in taxes in 2014. AFCU and 80 other Arkansas credit unions paid $0.00 in taxes. An individual taxpayer pays more in taxes than all credit unions combined. If the larger credit unions wish to compete for commercial lending, then let them convert their charters and pay taxes.”

Showmar acknowledged that, had the credit union been allowed to continue, the Tech Park would have had to become one of the credit union's SEGs or join an association that has a relationship with the credit union. However, Showmar pointed out that hundreds of organizations, both for-profit and non-profit, had become SEGs at the credit union and there was no reason why the Little Rock Tech Park could not have done so as well.

When asked for comment on the situation, ABA President/CEO Bill Holmes stressed the tax issue more so than the field of membership issue.

“There is something that is so incredibly ironic here,” Holmes wrote in an email to CU Times. “We are talking about an entity that is being financed and supported by sales tax revenues, and we, the ABA, believe that the financing should be through tax-paying financial institutions. It seems simple.”

At this point, the issue appears to be unresolved. The banks uninvited AFCU after the deadline for the credit union to make a loan proposal on its own had passed, and the details of the loan are still up for negotiation. So in theory, the Tech Park Authority could insist that AFCU be allowed to participate in the consortium if the loan is approved.

The Little Rock Tech Park project's director, Brent Birch, referred a question about the Tech Park Authority's official position on the controversy to two of the project's board members, but neither immediately responded to requests for comment.

Meanwhile, Cornerstone Credit Union League President/CEO Richard Ensweiler contrasted the banks' position on the matter.

“It amazes me that the best interests of the community are not the priority of community banks,” Ensweiler said. “They petition Congress saying they represent and serve the communities back home, but when it is time to step up to better the community, it is all about themselves. Credit unions are community partners. They understand the needs and services of the community, and have no ulterior motive to serve other than their total commitment to the best interests of the individuals and businesses living and working in the community or communities they serve. “