Nebraska Judge Affirms Regulator's Decision Denying a CU-Bank Acquisition
Ruling says the proposed transaction is not authorized under the so-called wildcard statute.
A Nebraska judge affirmed a decision of the Nebraska Department of Banking and Finance to deny an application for the $369 million Premier Bank in Omaha to be acquired by the $7.9 billion GreenState Credit Union in North Liberty, Iowa.
Premier Bank appealed the NDBF’s decision before Lancaster County District Court Judge Ryan S. Post, who ruled last week that the proposed transaction is not authorized under the wildcard statute that allows for state banks to have the same powers as national banks.
Premier Bank argued that one of the powers of federally chartered banks doing business in Nebraska is the authority to sell substantially all of its assets and liabilities to a credit union. Premier, a state-chartered bank, claimed that if a national bank has this power, so too does a state bank.
But Judge Post sided with the NDBF’s argument that while the wildcard rule allows a bank’s board of directors or officers to exercise all of the incidental powers necessary to conduct the business of banking, there is no specific power under the wildcard law to sell or buy bank assets.
“This Court agrees with the (NDBF) hearing officer that there is difficulty in finding in the statutes the authority of a bank to sell substantially all of its assets as being an incidental power to the carrying on of the business of banking, since Premier is not going to be carrying on the business of banking, but rather terminating it,” Judge Post wrote. “In the absence of authority under federal law empowering a national bank, on these facts, to sell substantially all of its assets and transfer substantially all of its liabilities, to a credit union, this Court cannot conclude that the wildcard statute grants Premier Bank any such power.”
Last year, the Nebraska Bankers Association (NBA) opposed Premier Bank’s proposed sale to Iowa’s largest credit union. Lawyers for the bank and the NBA made their arguments before the NDBF’s hearing officer Jim Titus. In January, he denied the application of the bank to be purchased by GreenState.
Premier Bank CEO and Board Chair Chris Maher and GreenState President/CEO Jeff Disterhoft declined to comment when reached on Wednesday, but they indicated they may issue a comment later this week.
On its website, the NBA speculated that Premier Bank may appeal the court’s decision and added, “Your NBA team will continue to aggressively work to level the playing field between tax-subsidized credit unions and Nebraska banks.”