08/14/26

The Ohio Bankers League is disappointed by the Ohio Division of Financial Institutions’ August 12 decision not to object to The Hicksville Bank’s proposed sale of substantially all of its assets and liabilities to Interra Credit Union.

This is not a routine transaction. If completed, it would be the first transaction of its kind in Ohio: a healthy, Ohio state-chartered community bank transferring substantially all of its assets and liabilities to an out-of-state, privately insured credit union, followed by the surrender of the Ohio bank charter.

OBL strongly disagrees with the Division’s decision.

Ohio law is clear in the place that matters most. Ohio Revised Code Section 1115.14 identifies the institutions to which an Ohio state-chartered bank may transfer assets and liabilities. That list includes banks and savings institutions. It does not include credit unions.

That omission matters. The General Assembly knows how to include credit unions in Ohio law when it chooses to do so. It did not do so here.

Rather than give effect to the specific statute governing bank asset transfers, the Division relied on Ohio’s parity statute. That statute was designed to help Ohio state-chartered banks compete with national banks and federal savings associations. It was not designed to allow an Ohio bank to eliminate its own charter and transfer its entire banking business to an out-of-state credit union.

Parity should strengthen the Ohio state banking system. It should not be used as a back door to dismantle it.

The Division’s reasoning creates a dangerous precedent. Under its interpretation, a broad parity provision can be used to overcome the limits of a more specific statute enacted by the General Assembly. That diminishes Ohio banking law and weakens the value of the Ohio state bank charter.

It also runs counter to the recommendation of the Ohio Banking Commission. The Commission, a Governor-appointed body created to provide banking industry input and recommendations to the Division, adopted a resolution opposing this transaction and urging regulators to deny or decline approval. The Division acknowledged that resolution, then proceeded in the opposite direction.

This transaction also carries real-world consequences that should not be brushed aside as mere policy concerns.

Hicksville customers currently hold deposits at an FDIC-insured Ohio bank. After the transaction, those accounts would become accounts at a privately insured credit union. The community would lose a tax-paying Ohio bank. The institution would no longer be subject to the Community Reinvestment Act. Local government banking relationships may also be affected because credit unions are not eligible public depositories in the same manner as banks under Ohio law.

Those are not side issues. They are central to what happens when a bank charter disappears.

The Division’s letter acknowledges concerns related to taxes, CRA, public deposits and private insurance, but treats them as outside the narrow unsafe-or-unsound inquiry it chose to apply. That narrow framing misses the larger issue. This transaction is about more than whether one bank and one credit union can close a deal. It is about whether Ohio banking law means what it says.

OBL believes the answer should be yes.

Ohio’s banking laws should not be changed through a one-off regulatory interpretation. The General Assembly should reject this expansion and clarify that Ohio state-chartered banks may not be acquired by credit unions or transfer substantially all of their assets and liabilities to credit unions.

OBL remains firmly opposed to the Hicksville-Interra transaction. We are reviewing the Division’s letter and evaluating every available option to challenge this interpretation and protect Ohio’s banking laws, Ohio taxpayers, Ohio depositors and the communities served by Ohio banks.