Orion Federal Credit Union in Memphis, Tenn., has been momentarily barred by a Tennessee court from moving ahead with its planned purchase of Financial Federal Bank in Memphis.
Davidson County Chancery Court Judge Patricia Moskal granted Tennessee Department of Financial Institutions Commissioner Greg Gonzales’ request for a temporary injunction to block the proposed merger, according to multiple media outlets.
Gonzales’ office had argued that the Tennessee Banking Act prevents the $1 billion-asset Orion from buying the $751 million-asset bank. The commissioner asserted that the law allows only bank holding companies to acquire, form or control a bank.
Orion and Financial Federal have argued that the deal, structured as a purchase-and-assumption agreement, is a purchase transaction – not an acquisition.
Judge Moskal also said the matter deserves “a speedy hearing,” ordering each side to submit a proposed scheduling order to make that happen.
The court’s ruling could add Tennessee to a list of states where it is hard for credit unions to buy banks.
Colorado banking regulators in January 2020 blocked a bid by Elevations Credit Union to buy the assets of Cache Bank & Trust. The bank was eventually sold to