Ken Hale’s recent op-ed, “The hidden cost of credit union-bank purchases,” warns that when a bank is sold to a credit union, local communities lose out – especially through lost tax revenue.

He cites Louisiana examples where such sales would “rob that community of a critical source of revenue.” As someone who works daily with credit unions and the communities they serve, I respectfully disagree. The notion that banks selling to credit unions drains communities is misleading. In reality, these voluntary sales are often community-saving partnerships that preserve hometown financial services and keep banking local.

When a community bank chooses to sell to a credit union, it’s because the bank’s owners and board have decided the credit union is the best steward for their customers, employees, and community’s future. These transactions are not hostile takeovers – they are negotiated, board-approved sales by willing sellers under full regulatory oversight. In an era when nearly half of all community banks have disappeared nationwide in the last two decades, allowing a credit union to step in can be a lifeline.

Blocking a sale to a credit union doesn’t keep the lights on at the bank – it only darkens the branch for good. In Louisiana and beyond, community banks are under pressure from consolidation and big-bank competition. Credit unions – by contrast – are not-for-profit, member-owned cooperatives with a mission to serve people, not maximize profits. When a credit union buys a community bank, what stays behind is what matters most: a locally governed financial institution that knows the community and puts people first.

While large banks have closed over 19,000 branches nationwide since 2012, credit unions have opened new branches – filling service gaps rather than creating them. Credit unions often step in where profit-driven banks pull out, from rural parishes to small base towns, keeping services in places that might otherwise become banking deserts.

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From their founding, credit unions have had a community-based, people-over-profit mission. They are member-owned cooperatives, not stockholder corporations. This means they don’t answer to Wall Street investors – they answer to their members. Earnings are reinvested in lower fees, better rates, and community programs. These benefits stay local, circulating back into the economy instead of flowing out to distant shareholders.

Size does not change this mission. A credit union with 500,000 members is still not-for-profit and member-owned, just like one with 500 members. Growth simply enables credit unions to compete with megabanks while retaining their cooperative ethos.

The facts back this up. Today, over 70% of all credit union branches are located in low- or moderate-income areas, far outpacing banks on that measure. Credit unions provide significantly more small-dollar loans at affordable rates than banks do, sparing working-class borrowers from payday lenders. Defense credit unions, in particular, serve junior enlisted service members and veterans who face unique financial challenges. Far from abandoning their mission, credit unions are doubling down on it.

At the heart of Mr. Hale’s critique is taxes. It’s true credit unions are exempt from federal and state income taxes. But this isn’t a loophole – it is a deliberate policy choice dating back to the 1934 Federal Credit Union Act, recognizing that credit unions’ not-for-profit, member-owned structure warrants different tax treatment.

Credit unions do pay plenty of other taxes. In Louisiana, credit unions collectively paid over $100 million in state and local taxes last year – including property taxes, payroll taxes, and sales taxes. They fund public services through those taxes and through direct financial benefits to members.

And what about banks? Many enjoy their own generous tax breaks. For example, over 2,000 banks nationwide – including dozens in Louisiana – have elected Subchapter S status, which allows them to pay no corporate income tax at all. This tax avoidance saved banks an estimated $1.8 billion in 2022. Yet we rarely hear bank lobbyists mention it when they criticize credit unions’ tax exemption.

Moreover, the sale of a bank to a credit union is not tax-free. These transactions typically generate significant one-time tax revenue – such as capital gains taxes paid by the selling bank’s shareholders. That often exceeds what the bank would have paid in income tax for years. Meanwhile, the credit union continues to pay payroll and property taxes locally, and its members contribute to the tax base with their wages and spending.

If policymakers are concerned about fairness, they should examine both sides of the ledger. It is disingenuous for banks to cry foul over credit unions’ exemption while quietly benefiting from their own tax-avoidance strategies.

The most important point is this: banks selling to credit unions helps communities far more than it hurts them. The real threat to local access has been the disappearance of community banks through consolidation.

Some critics suggest there is a “wave” of sales to credit unions. In reality, these deals are rare. Since 2012, fewer than 0.3% of U.S. banks have been acquired by credit unions, representing a negligible share of banking assets. In the same period, over 2,000 bank-to-bank mergers have taken place. If we’re worried about the disappearance of local banks, the real cause is banking industry consolidation – not the handful of sales to credit unions.

When a bank sells to a credit union, employees usually keep their jobs, branches stay open, and customers become member-owners with access to better products. The alternative is often a sale to a large out-of-state bank, followed by branch closures and layoffs. Credit unions keep financial decision-making local and ensure hometown branches don’t go dark.

The bottom line is this: banks selling to credit unions is about preserving service, not exploiting a tax break. A credit union is already tax-exempt whether it grows or not. The motivation is mission, not taxes.

When OnPath Federal Credit Union purchased Heritage Bank of St. Tammany, its CEO praised the bank’s “unwavering commitment to the local community.” That’s exactly the point: credit unions seek partners that share a community focus and work to keep that legacy alive.

Rather than harming communities, these sales prevent harm. They prevent the loss of local access, prevent layoffs, and prevent the erosion of community ties. Far from draining communities, credit unions strengthen them by keeping branches open, employees working, and members empowered.

Louisiana’s credit unions have been part of our communities for generations, founded to serve workers, servicemembers, teachers, and families who often struggled to get fair treatment from profit-driven banks. That legacy continues.

When a community bank’s owners decide it’s time to exit, partnering with a credit union ensures that financial decision-making stays local and that deposits are reinvested at home. Banks selling to credit unions is not a hidden cost – it’s a visible benefit for families and neighborhoods.

Instead of attacking credit unions for following the law and fulfilling their mission, we should recognize the value they deliver. When a bank finds a new home in a credit union, the community gains a stable, member-focused institution for the long haul. That’s a win-win for Louisiana.