Greg Gonzales, the commissioner of the Tennessee Department of Financial Institutions, has appealed a judge’s decision that would allow Orion Credit Union to buy Financial Federal Bank.
Gonzales argued in his appeal, filed on June 14, that depositors of the bank would be “irreparably harmed and disrupted” if the acquisition closes. He also argued that it would create confusion if the deal closes and is subsequently nullified by an appeals court.
The $1 billion-asset Orion agreed to buy the $774 million-asset Financial Federal in August. Both financial institutions are based in Memphis.
Gonzelez succeeded in getting an injunction to block the transaction in December, but Davidson County Chancery Court Judge Patricia Moskal ruled in May that the deal is permissible because Orion is buying the bank’s assets – not the charter or stock.
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 would lead to the loss of about $15 million in local, state and federal tax revenue over the next decade.
Tennessee is one of several states where credit union purchases of banks have hit roadblocks. The others include Colorado, Mississippi and Nebraska.