A business deal in Iowa’s financial community may mean anearly-precedent-setting transaction. Ben Hildebrandt, spokesman for theIowa Bankers’ Association, says a credit union proposes to buy a bank.The University of Iowa Credit Union has bought the Hawkeye State Bank inIowa City, an “almost unheard-of” transaction, he says, in credit-union andbanking circles. Hildebrandt says it’s incredibly rare because creditunions and banks have traditionally kept their distance.Credit Unions were set up for membership groups of people linked to someentity, like a manufacturing organization, university or hospital, and banksare very different, he says. Hildebrandt says the first reaction frombankers was that the purchase is NOT a good thing for taxpayers of Iowa Cityor Johnson County. He says a credit union doesn’t pay state or federalincome taxes and Hildebrandt says if one buys a bank, he questions whetherthe credit union’s grown too large to benefit the public good.Buying a bank isn’t like forming a members’ group, Hildebrandt says, and ifa credit union “wants to walk like a bank and talk like a bank,” then hesays it should pay taxes…just like a bank. A news release from the twofinancial institutions says the University of Iowa Credit Union has380-thousand members, and doesn’t list statistics or assets for HawkeyeSavings Bank. The deal must still win regulatory approval.
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