Orion Federal Credit Union’s pending purchase of Financial Federal Bank in Memphis is back on track after a judge in Tennessee lifted a temporary injunction that had blocked the transaction.
The $1 billion-asset Orion, which is also based in Memphis, agreed in August to buy the $774 million-asset Financial Federal. Greg Gonzalez, commissioner of the Tennessee Department of Financial Institutions, raised concerns about the deal’s legality, arguing that state law only allows banks to buy banks.
Davidson County Chancery Court Judge Patricia Moskal, who issued an injunction in December, ruled on Friday that the transaction is permissible because Orion is buying the bank’s assets – not the charter or stock.
It is unclear if the ruling will be appealed.
The Tennessee Bankers Association has been opposed to the acquisition.
Colin Barrett, the association’s president and CEO, asserted in an August blog post that the acquisition will lead to the loss of about $15 million in local, state and federal tax revenue over the next decade.
Tennessee was one of several states where credit union purchases of banks had hit roadblocks. The others include Colorado, Mississippiand Nebraska.
At the same time, VyStar Credit Union and Heritage Southeast Bank have pushed back the closing date of their pending deal several times while awaiting regulatory approval.