Mississippi has joined the ranks of states intervening to stop credit unions from buying banks.
Gov. Tate Reeves signed into law legislation requiring that any assets or liabilities sold by state-chartered banks must be bought by institutions insured by the Federal Deposit Insurance Corp.
“A bank chartered by the State of Mississippi may, with the approval of the [banking] commissioner, sell or transfer all, or substantially all, of its assets, liabilities, and businesses only to another bank, savings bank, savings and loan association or other entity” insured by the FDIC, the law states.
The banking commissioner can issue a cease-and-desist order to any state-chartered bank that tries to sell itself or “transfer substantially all assets” to an unauthorized buyer.
Mississippi has 59 state-chartered banks with a total of $111 billion of assets, according to the Mississippi Bankers Association.
The law is set to take effect on July 1.
“We were glad to see this legislation through the Mississippi Legislature by unanimous vote, and we appreciate the efforts of many bankers that worked to support the MBA’s efforts in passing this new law,” a spokeswoman for the Mississippi Bankers Association said. “In crafting this legislation we were focused on meeting the industry goal of fair competition while also working to ensure that bank-to-bank transactions would not be harmed.”