ARDEN SHANK: If credit unions want to acquire community banks, they should face accountability

ARDEN SHANK: If credit unions want to acquire community banks, they should face accountability

August 28, 2026, Goshen News, ARDEN SHANK: If credit unions want to acquire community banks, they should face accountability Interra Credit Union has been a welcome and respected financial institution in the Goshen area for a long time. On April 29, 2026, the $2 billion asset Interra Credit Union in Goshen released a press statement announcing that it was acquiring the $225 million asset The Hicksville Bank and its holding company, Empire Bancshares Inc., in a $31 million all-cash transaction. Interra described the acquisition as an attempt to strategically expand financial access into Northwestern Ohio. In reality, it reflects a rapidly growing national trend: large, tax-exempt credit unions buying up community banks at an unprecedented rate. In 2024 alone, 22 credit union bank deals were announced nationwide, as well as 16 deals in 2025. The agreement is still contingent on obtaining regulatory and bank stockholder approvals, but the proposed transaction has been approved by both institutions’ boards of directors. To many people, this may seem like just another financial merger. However, this acquisition represents something larger. When community banks disappear, communities risk losing institutions that understand local businesses, relationships and credit needs. Small businesses may have access to fewer locally rooted lending officers. Residents may lose transparency into whether their communities are being fairly served. And taxpayers lose out with the expansion of institutions that are exempt from many of the same regulations imposed on traditional banks, as pointed out by the Ohio Bankers League and Community Bankers Association of Ohio’s opposition to this merger. The proposed acquisition matters because it represents the quiet disappearance of one of the few federal safeguards designed to ensure banks serve the communities around them. Since 1977 when it was passed, the Community Reinvestment Act (CRA) has required banks to meet the credit needs of all of the communities where they chartered to do business, including low- and moderate-income neighborhoods. The CRA has been successful at ensuring that working-class borrowers and neighborhoods have access to homeownership and entrepreneurship, with CRA-qualified mortgages and small business loans between 2010-2024, amassing over $157 billion in Ohio. CRA has also led to many banks supporting Community Development Financial Institutions (CDFIs) because the law created public accountability. Banks are periodically evaluated on their lending performance, and poor CRA ratings can affect their ability to merge or expand. Credit unions such as Interra, however, are exempt from CRA requirements. That exemption becomes especially concerning when a CRA-regulated, tax-paying, FDIC-insured community bank is absorbed by a large, tax-exempt, non-CRA-regulated, out-of-state credit union. This is not a rescue merger. The Hicksville Bank has not been in any financial trouble. It has earned a profit every quarter, has kept its loan losses near zero, and has held ample cash and easy-to-sell assets. Instead, this deal illustrates how regulatory advantages fuel acquisitions. Empire Bancshares shareholders are expected to receive at least $47 per share, which is more than double the stock’s typical trading value that has fluctuated around $18-$22 per share. The deeper concern is what communities lose once these acquisitions occur. When a community bank disappears into a non-CRA-regulated institution, the public loses an important layer of accountability and transparency. Research also shows that after credit unions acquire community banks, small business lending declines. Because community banks play a huge role in financing entrepreneurs and supporting local economic development, the loss of these institutions can reshape who receives access to credit, which businesses grow and which neighborhoods receive investment. These concerns become harder to ignore when looking at Interra’s own lending record. The Home Mortgage Disclosure Act (HMDA) data from 2024 shows an institution that seldom lends to working-class people or in lower-income neighborhoods. Across the 14 Indiana counties where Interra made home purchase loans, only 4.7% of those loans went to low- and moderate-income neighborhoods. Every other lender in those same counties did nearly four times better, at 17.4%. The pattern holds for borrowers as well as neighborhoods. Just 26.6% of Interra’s home purchase loans went to low- and moderate-income borrowers, against 38.3% for the rest of the market in the 14 counties. The same pattern of whom Interra reaches, and whom it does not, shows up by race. In those 14 counties, Black applicants made up just 0.6% of the applications Interra acted on in 2024, 10 applications in all, of which only one became a loan. Across the rest of the market in the same counties, Black applicants accounted for nearly 5% of applications, about eight times Interra’s share, while Black residents make up roughly 7% of the area’s population. The issue is not only how Interra decides on the applications it receives, it is also that so few Black borrowers appear to reach Interra’s door in the first place, which points to questions about outreach, marketing and presence in these communities. While lending to Hispanic borrowers for home purchase was comparable to other lenders in the same market, Interra’s lagging record for lending to Black and low-income borrowers is less than adequate. These concerns do not automatically prove discrimination, but they do raise important questions about accountability and outreach, particularly for an institution seeking to expand its footprint into new communities outside of Indiana, while at the same time operating outside of CRA requirements. These questions and concerns are especially important in Goshen itself, where the city’s demographics have changed greatly over the past three decades. As of July 2025, 33.8% of its residents are Hispanic or Latino, while Hispanic students make up roughly 57% of Goshen Community Schools. A community changing this quickly depends on lenders who reach all of its residents, including those of modest means. On that measure, Interra falls short. It reaches low- and moderate-income neighborhoods and borrowers at well below the rate of every other lender in its market, the very income measures the Community Reinvestment Act exists to evaluate. The Hicksville Bank is a small lender, but under the CRA even its modest lending was examined for how well it reached low- and moderate-income borrowers and neighborhoods, and the results were made public. Interra faces no such review. When the bank is absorbed, that scrutiny ends, and nothing comparable takes its place. Financial institutions do more than hold deposits. They represent lives. Behind every account balance is a family saving for a home, an entrepreneur pursuing a lifelong dream, or parents striving to create a better future for the next generation. If credit unions want the benefit of acquiring community banks and expanding into new markets, they should be held to the same standards and obligations to community reinvestment and public accountability that traditional banks face. Real lives and communities may well be at stake if this trend continues. Community banking depends on transparency, trust, and a commitment to our communities. We cannot have neighborhoods and families being pushed further away from opportunities that should be theirs. I invite Interra’s leadership to make the plans and changes needed to address the serious lapses noted here by involving its members and the community