The expansion into the Blue Ridge Mountains area taps into more than 250,000 potential new members.
Courtesy of Michael Ogden, Credit Union Times
August 8, 2022 — The Chattanooga, Tenn.-based Tennessee Valley Federal Credit Union (TVFCU) announced Monday it received NCUA approval to expand its field of membership into four counties in the mountainous area of northern Georgia.
TVFCU ($2.4 billion in assets, 171,718 members) stated its 17-county membership will now include the Georgia counties of Chattooga, Gordon, Murray and Whitfield. The inclusion of these counties potentially grows its field of membership by 266,493, according to the U.S. Census Bureau.
“We are both humbled and delighted as we extend TVFCU’s services to new communities across North Georgia,” Todd Fortner, president/CEO of TVFCU, said. “As always, we remain dedicated to supporting our members’ financial health and enhancing their lives through outstanding products and services, friendly and efficient service and an active presence within local organizations and community events.”
According to a statement from TVFCU, with the NCUA’s expansion approval, qualifying individuals who live, work, worship, attend school or volunteer in the areas are eligible for all of TVFCU’s products and services.
Credit union officials stated that its online and mobile banking features allow it to fully serve these new areas “before any branches are built in their communities.”
TVFCU did not indicate when new branches might be built in the new field of membership expansion area.
“Our team is eager to meet new people, visit new places and continually build relationships in Whitfield, Murray, Gordon and Chattooga counties,” Fortner said. “As a not-for-profit financial cooperative, our continuous goals are to boost the financial health and success of our members, provide outstanding member service and become a community-wide asset everywhere we operate.”
Delaying the deal’s closing is running up costs and uncertainty for both financial institutions, court documents show.
Courtesy of Peter Strozniak, Credit Union Times
July 19, 2022 — A Tennessee judge placed a stay on her previous ruling, which allows a regulator to ask the state’s appeal court to stop the $1 billion Orion Federal Credit Union from purchasing the $818 million Financial Federal Bank.
Davidson County Chancery Court Judge Patricia Moskal ordered the stay Monday on her previous ruling, which rescinded her temporary injunction to allow the Memphis-based credit union to buy the bank. She initially blocked the purchase with a temporary injunction last November after the Tennessee Department of Financial Institutions (TDFI) said the acquisition agreement is prohibited under state law.
After hearing legal arguments from the state regulator, Financial Federal and Orion, Judge Moskal ruled on May 27 that the acquisition is allowed under state law, and she rescinded the temporary injunction.
However, the TDFI last month filed a request to stay Judge Moskal’s ruling, which she granted, until the state regulator’s appeal could be heard and decided by the Tennessee Court of Appeals.
Orion and Financial Federal argued against the stay in jointly filed court documents, saying the acquisition’s delay has cost them financially.
The bank faces increased rates for certain contracts due to the need to move to shorter terms based on the uncertainty of an acquisition closing date. In addition, it is critical for the bank to have a reasonably certain closing date for the transaction for future contract negotiations and to provide peace of mind for its employees and shareholders, the financial institutions said in court documents opposing the state’s requested stay of the judge’s ruling.
Orion also argued in court documents that in the parties’ application to the FDIC, the credit union projected a post-closing increase of net income of approximately $725,000 per month.
“The (TDFI) Commissioner’s opposition has prevented Orion from realizing this net income,” the financial institutions said. “Yet another stay – after the Commissioner already lost on the merits – would continue to deprive Orion of this income.”
The financial institutions did not indicate in court documents whether another delay could lead to the cancellation of the acquisition deal.
Nevertheless, the financial institutions said another delay would mean that it would be months before FFBank could resubmit its FDIC application, and that the bank, its shareholders and customers could be at risk of facing “undesirable alternatives to the Orion transaction.”
Courtesy of Peter Strozniak, CU Times
June 28, 2022 — Permitting the deal to close before a decision on appeal would undermine the legal authority and duties, the TDFI argues.
A Tennessee judge will hear arguments in July on whether to temporarily block, for the second time, the acquisition of a bank by a credit union both based in Memphis.
The Tennessee Department of Financial Institutions (TDFI) filed documents on June 14 to appeal a May 27 court ruling that allows the $1 billion Orion Federal Credit Union to move forward with its proposed purchase of the $818 million Financial Federal Bank in Memphis, which would lift Orion as the sixth-largest financial cooperative in Tennessee with nearly $1.9 billion in assets.
Based on the TDFI’s position that the deal is prohibited under state law, Davidson County Chancery Court Judge Patricia Moskal granted an injunction last November that temporarily blocked the planned credit union-bank buy. After hearing arguments from both sides, Judge Moskal lifted the injunction last month that temporarily blocked the deal.
However, the Tennessee regulator said in court documents that permitting the purchase transaction to close before a decision on appeal would undermine the TDFI’s legal authority and duties to enforce state law and prevent acquisitions that violate it.
“For example, if the status quo is not maintained and the purchase transaction is consummated while the appeal is pending, the (TDFI) commissioner’s appeal would effectively be rendered moot because of the extreme difficulty, if not impossibility, of attempting to undo the transaction in the event the commissioner prevails on appeal,” TDFI’s argued in court documents.
Attorneys for the credit union and bank did not respond to CU Times‘ request for comment. As of Tuesday at 11 a.m., they did not file a legal brief opposing the state’s appeal argument.
The deal was allowed to move after attorneys for the credit union and bank argued that the proposed transaction was not prohibited because the term “acquire” or “acquire a bank” under Tennessee law is limited to the acquisition of a bank as a corporate entity by acquiring the bank’s stock or charter. What’s more, they also argued the Tennessee regulator interpreted “acquire” too broadly, and that the term does not extend to Orion’s proposed purchase of all or substantially all of the assets and assumption of Financial Federal Bank’s liabilities, which the financial institutions referred to in an undisclosed definitive agreement announced in August 2021.
Courtesy of Ray Birch, CUToday.info
May 31, 2022 – The $1.1-billion Orion FCU’s deal to acquire $751-million Financial Federal Bank is on again, following a legal challenge by the Tennessee Department of Financial Institutions that temporarily blocked the sale. The DFI’s challenge was dismissed late last week. Michael Bell, the pioneer of credit union purchases of banks, believes the decision could slow down bankers’ efforts to block these sales.
As CUToday.info reported, a Tennessee court late last year issued a temporary injunction blocking the sale of Memphis-based Financial Federal Bank to Orion Federal Credit Union, which is also headquartered in Memphis. This is not the first time a credit union acquisition of a community bank has been challenged in court. As CUToday.info has reported, such sales have previously been blocked in Iowa and Colorado.
The Tennessee Department of Financial Institutions (TDFI) challenged the Orion acquisition, claiming it is prohibited under the Tennessee Banking Act.
In the complaint, TDFI said that the definition of “acquire” should be “limited to the acquisition of a bank’s stock or charter,” and accordingly prohibits Orion’s purchase of all or substantially all of the assets and assumption of the liabilities of state-chartered Financial Federal Bank.
According to court documents in the Orion FCU case, Tennessee’s 12th Judicial District Court determined there is no “genuine issue of disputed material facts, and, as a matter of law, the proposed asset purchase transaction is not a prohibited transaction under Tenn. Code Ann. §45-‘2-107(a). Accordingly, Department’s motion for summary judgment should be denied, and Defendants’ respective motion for summary judgment should be granted.”
The ‘Same Argument’
Bell, partner and co-chair of the Financial Institutions Practice Group at Honigman, LLP, which represents Orion FCU in the transaction but not the lawsuit, pointed out that all the legal challenges purchases by credit unions of banks have focused on a bank’s legal right to sell to a credit union.
“It is generally the same argument by bankers—essentially they argue that the bank doesn’t have the power to sell to a credit union,” said Bell, who has been involved in well over 45 whole-bank agreements, plus additional bank branch purchases.
In its ruling the court stated the “statutory construction to be given the term ‘acquire’ or ‘acquire a bank’ for purposes of § 45-2-107(a) is a question of law. The Court construes the plain language of that term…does not extend to the purchase of all or substantially all of the assets of a bank. Instead, the sale of bank’s assets is otherwise provided for in § 45-2-609, which permits a bank to sell all or substantially all of its assets without limitation as to the acquiring entity, subject only to the rights of dissenting shareholders.”
January 5, 2022 — The past year saw many legislative victories for credit unions. Credit union advocates were prepared, ready and active throughout 2021 and made a big difference. Let’s look back on a few of the victories from 2021:
Interchange: The League teamed up with Bankers Association and card companies to defeat legislation for the second consecutive year that would remove state and local sales tax from calculation of interchange fees, protecting 10% of Tennessee credit unions interchange income. This issue is far from over as the Bill has been rolled to the first calendar of 2022. We will be fighting interchange again this year and need our credit union advocates ready!
C-PACE: The League was able to work to amend legislation authorizing municipal backed Commercial-PACE loans to not sit ahead of the first mortgage in lien priority. This is key for our credit unions to keep their right position in the lien priority structure.
Covid-19: The League joined forces with other business groups to help ensure limited liability to credit unions in regards to COVID-19 exposure with exception for cases of gross negligence.
July 15, 2021 – The National Association of State Credit Union Supervisors (NASCUS) is proud to announce Tennessee has earned Re-Accreditation following a series of in-depth reviews and assessments by a panel of veteran state supervisors.
More than 88% of the $989 billion in state-chartered credit union assets are supervised by NASCUS’ 28 accredited state agencies.
“Accreditation is direct evidence of an agency’s capabilities and benefits all credit unions in the state as well,” said NASCUS President and CEO Lucy Ito. “It recognizes the professionalism of a state agency’s regulators, supervisors, and staff, while potentially delivering an impetus and support for legislation to modernize state law and policy changes to advance state supervisory processes and best practices.”
“Across the country, Accreditation makes the state system stronger. It continuously helps us improve and provides us with credibility and support to fulfill our responsibilities to the people of Tennessee. We are proud to have a strong and collaborative working relationship with NASCUS, other state regulators, and within the credit union industry.” commented Greg Gonzales, Tennessee Commissioner.
NASCUS accreditation is a robust process that includes disciplined self-evaluation, peer review, and ongoing monitoring. The process, administered by the NASCUS Performance Standards Committee (PSC), measures a state regulatory agency’s ability and resources to carry out its regulatory and supervisory programs effectively. To earn Accreditation, a credit union state supervisory agency must demonstrate that it meets accreditation standards in agency administration and finance, personnel and training, examination, supervision, and legislative powers.
NASCUS adopted the Accreditation Program in 1989 to administer and assure states’ credit union examination and supervision quality standards. This program, modeled on the university accreditation concept, applies national performance standards to a state’s credit union regulatory program.
TriStar Advocacy Report
MARCH 17, 2021
Homestead Exemption Bill Hits a Snag
We have a couple of big updates on the state-level advocacy front to report. First, our bill to increase the Homestead Exemption hit a massive snag as Legal Services filed it with the wrong caption. This essentially renders the bill inoperable because the bill would change sections of the TN code that are not covered by the caption – which isn’t allowed. We’re still working through the processes on what it means for this year, but the likelihood of success isn’t that good right now and requires going through a Committee called Delayed Bills. We’ll keep you posted should there be any future movement.
On the Interchange front, we feel quite confident in our position in the House Banking & Consumer Affairs Committee and have been continuously working to ensure that the bill dies there. Similar to last year, on the Senate side of things, the story is a little different. The bill will be in front of the Revenue Subcommittee of Senate Finance, Ways & Means next week. That committee will attach a positive, negative, or neutral recommendation to the legislation. While we cannot kill it in Revenue Sub, we’re working with the full committee now to prepare for when it does arrive in full.
Tennessee regulator named to federal panel
March 9, 2016 — Greg Gonzales, commissioner of the Tennessee Department of Financial Institutions, has been appointed to the State Liaison Committee (SLC) of the Federal Financial Institutions Examination Council (FFIEC), an umbrella group for federal financial regulators, including NCUA. READ
Dupont Credit Union Adopts Scenic Community Name
May 14, 2015 – Chattanooga, Tenn. – The Dupont Community Credit Union is dropping the Dupont name it has used since its start 61 years ago. This week, new signs were put at the credit union’s four offices boasting the new name: Scenic Community Credit Union.
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