The pace of credit union acquisitions of banks has slowed this year after reaching record levels in 2024, but advisers working on the deals say the pipeline remains active as financial institutions navigate consolidation, shifting valuations and mounting political scrutiny.

That tension was on display this week in Minnesota, where Blaze Credit Union announced it would acquire the Claremont branch of Luminate Bank, extending the $4.8 billion-asset credit union’s reach farther into southeastern Minnesota.

The transaction is smaller than the whole-bank acquisitions that have fueled much of the recent debate around credit unions, but it arrives at a moment when even modest deals are drawing sharper attention from bankers and regulators alike.

Blaze said the acquisition includes roughly $25 million in deposits, about 550 customers and the physical branch location in Claremont, a town along U.S. Highway 14 between Rochester and Waseca. The branch sits less than 30 miles from Blaze’s recently opened Rochester office.

“We are excited about bringing the Blaze way of banking to Claremont and the surrounding area,” Dan Stoltz, Blaze’s president and chief executive, said in a statement. “Our mission is to better lives.”

The deal is expected to close by Oct. 9, pending regulatory approval. Blaze said the branch would remain operational after the transition and that customers would gain access to the credit union’s broader network of 30 locations.

For Blaze, the transaction represents another step in the rapid growth of a credit union born from consolidation itself. In 2023, Hiway Credit Union and SPIRE Credit Union merged to form Blaze, creating one of the Twin Cities’ largest financial cooperatives. The institution now serves more than 256,000 members and reported $4.8 billion in assets at the end of the first quarter, according to National Credit Union Administration call report data. It earned $10 million during the quarter, up from $9.1 million a year earlier.

Luminate Bank, meanwhile, reported $511 million in assets and posted earnings of $15.3 million in 2025, compared with $9 million the year before, according to Federal Deposit Insurance Corporation data.

“We remain deeply committed to community banking in the markets we serve and are confident that Blaze Credit Union will provide strong local support and excellent service to our Claremont customers,” Marc Campbell, Luminate Bank’s chief executive, said in a statement.

The Minnesota agreement comes amid a broader recalibration in the market for credit union-bank transactions.

According to S&P Global Market Intelligence, 16 acquisitions of banks by credit unions were announced in 2025, down from a record 22 in 2024. Only four whole-bank transactions have been announced so far in 2026.

But attorneys and advisers involved in the deals say the slowdown may prove temporary.

Jeff Cardone, a partner at the law firm Luse Gorman who advises institutions on credit union-bank transactions, said the reduced volume this year reflects timing more than retreat.

“I have a bunch of CU/bank deals under LOIs that are moving at different speeds,” Cardone told Tyfone, referring to letters of intent. “I think we will end up with around 10 CU/bank deals this year.”

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Cardone said the market has shifted in several ways since the surge of transactions over the last two years. There are fewer independent bank targets available after years of consolidation, he said, while improving bank stock performance and a more favorable regulatory environment for banks have made traditional bank buyers more competitive against credit unions.

Even so, credit unions continue to pursue acquisitions as a way to expand geographically, gain deposits and add commercial banking capabilities.

The trend has provoked increasingly vocal resistance from banking trade groups, particularly in states where proposed deals would move bank assets into tax-exempt credit union structures.

Late last month, Interra Credit Union, a nearly $2 billion-asset institution, announced plans to acquire The Hicksville Bank in northwest Ohio. Soon afterward, the Ohio Bankers League said it was prepared to oppose the transaction through regulatory action, legislation and litigation if necessary.

The Ohio Credit Union League responded by defending the deal and arguing that credit unions reinvest earnings into members and communities rather than shareholders. The group also noted that Ohio regulators approved a similar transaction involving bank assets and a credit union in 2019.

“This sale represents the best business decision for everyone involved, and we’re disappointed that the bank lobby is threatening to harm Hicksville Bank, Interra Credit Union, and the Hicksville community with frivolous and politically-motivated litigation,” said Paul Mercer, President of the Ohio Credit Union League.

The clash reflects a broader fight unfolding across the financial services industry as credit unions grow larger and increasingly compete in markets once dominated by community banks.

Banking groups have long argued that credit unions’ federal tax exemption gives them an unfair advantage in acquisitions and commercial lending. Credit unions counter that their not-for-profit structure and member-owned model justify the distinction.

Meanwhile, branch-level transactions continue moving forward with less visibility than whole-bank acquisitions.

Earlier this year, ABNB Federal Credit Union agreed to acquire two North Carolina branch locations from First Bank of Virginia, part of an ongoing reshaping of community banking networks across regional markets.

There have been a handful of others.

For many institutions, these smaller branch acquisitions offer a less disruptive path to expansion while preserving physical banking access in communities where branches might otherwise disappear.

That dynamic appears central to the Blaze-Luminate transaction.

The deal preserves an in-person banking presence in Claremont while giving Blaze a foothold in another part of southeastern Minnesota, an area where competition for deposits and consumer relationships has intensified as larger institutions push farther into regional markets.

Whether the pace of acquisitions accelerates again this year may depend less on appetite than on economics. If anything, the industry’s strategic logic remains intact: scale matters more than ever, and institutions on both sides of the deal table continue searching for it.

“I think we will end up with around 10 CU/bank deals this year.”

– Jeff Cardone
Partner
Luse Gorman