08/12/26
The Ohio Bankers League is deeply disappointed by the Ohio Division of Financial Institutions’ August 12th decision not to object to The Hicksville Bank’s proposed sale of substantially all its assets and liabilities to Interra Credit Union. The Ohio Division of Financial Institutions had a clear choice: enforce the will of the Ohio Legislature by enforcing current Ohio law or find a way to allow an out-of-state credit union to acquire an Ohio community bank. It chose the credit union.
In an August 12 nonobjection letter, the Division concluded that The Hicksville Bank may proceed with the proposed sale of substantially all its assets and liabilities to Interra Credit Union, an Indiana-chartered, privately insured credit union. OBL strongly disagrees with that decision. The Division used seven pages of legal jargon, technical distinctions and strained statutory interpretations to avoid the conclusion that is obvious to anyone reading Ohio law in plain English.
Ohio Revised Code Section 1115.14 authorizes what institutions an Ohio-chartered bank may transfer its assets and liabilities. The list includes other banks and savings institutions. It does not include credit unions. That should have ended the analysis. The Ohio General Assembly knew how to write “credit union” into the law. It chose not to do so. The Division nevertheless concluded that because the statute does not separately and expressly prohibit a transfer to a credit union, the transaction must be permissible under a different, more general provision of Ohio law. Under the Division’s absurd “not expressly forbidden” theory, the General Assembly’s carefully written list of eligible institutions has little practical meaning. If an institution omitted from the statute can still acquire an Ohio bank through a broad invocation of parity authority, there was no reason for the legislature to enact a specific list in the first place. That is not a how statutes work, it is legal gymnastics designed to reach a preferred result.
Rather than enforce that list, the Division reached for Ohio’s parity statute. That law was intended to ensure Ohio-chartered banks can compete with national banks and federal savings associations. The Division has now transformed it into authority for an Ohio bank to eliminate its own charter and transfer its business to an out-of-state credit union. Parity was meant to strengthen Ohio’s banking system—not provide a back door for dismantling it.
The Division’s reasoning is especially troubling because it effectively allows federal regulatory actions to override the choices made by the Ohio General Assembly. The letter points to transactions permitted by federal regulators and concludes that, because national banks and federal savings associations have completed similar sales, Ohio banks must have the same power. That argument allows the Division to import a federal power into Ohio law even though the Ohio statute specifically governing these transactions does not authorize sales to credit unions. In doing so, the Division has allowed an Indiana credit union to defy the will of the Ohio legislature and acquire an Ohio bank through a transaction Ohio law does not expressly permit. The Division also bent over backwards to avoid confronting the consequences for the Hicksville community.
Interra is exempt from significant state and federal taxes. It is not subject to the federal Community Reinvestment Act. It cannot serve as an eligible public depository under Ohio law. The transaction would move Hicksville’s deposit base from insurance backed by the full faith and credit of the United States to a private insurance arrangement. The Division acknowledges each of these concerns and then dismisses them as “policy considerations” outside the narrow unsafe-or-unsound standard it chose to apply.
Those are not side issues. They are the real-world consequences of this transaction.
Local governments could lose access to a financial institution capable of holding their deposits. The community would lose the protections and reinvestment obligations that come with a bank charter. Taxpayers would see another financial institution removed from the tax base. Depositors would be moved from federal deposit insurance to private coverage.
A regulator determined to protect Ohio’s banking system would have taken those consequences seriously. This Division instead defined its review so narrowly that virtually none of them could affect the outcome.
The Division was not powerless. It made a choice. It chose a strained interpretation of a general parity statute over the plain language of the specific law governing bank asset transfers. It chose to treat the General Assembly’s omission of credit unions as meaningless. It chose to disregard the loss of federal deposit insurance, public-depository capacity, tax revenue and Community Reinvestment Act protections. Most importantly, it chose not to defend the integrity of Ohio’s banking charter.
That represents a stunning lack of regulatory fortitude.
OBL cannot accept the proposition that an out-of-state credit union may accomplish through legal maneuvering what the Ohio General Assembly has never authorized. If credit unions are to be added to the institutions eligible to acquire Ohio banks, that decision belongs to the elected members of the General Assembly—not to regulators searching for a workaround after the fact. OBL remains firmly opposed to the Hicksville-Interra transaction. We are reviewing the Division’s letter and evaluating every available avenue to challenge its interpretation and protect Ohio’s banking laws, Ohio taxpayers and the communities served by Ohio banks.
TAKE ACTION!
We are asking every OBL member to contact their state legislators because the Division of Financial Institutions’ decision to allow an out-of-state credit union to acquire The Hicksville Bank defies the will of the General Assembly and creates a dangerous precedent for Ohio’s entire state-chartered banking industry. Click here to take action today