ICUL Statement on Bank Superintendent Decision 3/5/2020
“It is shameful for the Superintendent of the Iowa Division of Banking to inject politics and personal gain into a legal business transaction. Jeff Plagge is both Superintendent of the Iowa Division of Banking and CEO of Northwest Financial Corp, a $2 billion banking conglomerate which owns Northwest Bank. He serves as the regulator and regulated for a bank he owns and leads. Further, Northwest Bank has branches in the Des Moines and Fort Dodge markets which overlap with the branch locations that First American Bank (FAB) chose to sell to GreenState Credit Union. Mr. Plagge’s attempt to halt this business transaction would benefit his bank, and himself personally. This is a blatant conflict of interest that Mr. Plagge should have disclosed. He is also former chairman of the Iowa Bankers Association and has publicly been critical of credit unions for years, which further calls into question the impartiality of his decision-making.
Bank owners ultimately determine who they sell to and this isn’t a unique transaction. Credit union purchases of banks have occurred in 14 states over the last eight years. In fact, the recent sale of FAB branches to a Florida credit union was met with no objection from the Iowa Division of Banking in late 2019.
As a trade association, the Iowa Credit Union League does not get involved with the mergers and acquisitions of our membership. However, we strongly believe that Iowa consumers win when they have more access to not-for-profit, member-owned credit unions. The acquisition of these branches by an Iowa credit union ensures all deposits stay with an Iowa-owned institution and are not sent out-of-state. The new credit union members will benefit financially to the tune of millions of dollars from the credit union’s better rates and lower fees. In addition, the state treasury will see increased tax revenue as highlighted by a 2019 financial analysis verified by ISU economist Dr. Keri Jacobs.”
Murray Williams, President & CEO, Iowa Credit Union League