“From my perspective, the bank should not have moved forward,” Shauna Shields, bank bureau chief for the IDOB, said on Wednesday.

GreenState Credit Union, of North Liberty, publicly announced during the summer of 2019 that it had entered into an agreement to acquire the business operations of First American Bank.

The agreement was to become effective Feb. 29, pending receipt of final regulatory approvals. The acquisition represents about $200 million in loans and $500 million in deposits.

GreenState, with its $5.5 billion in assets and 200,000 members, opened its Fort Dodge office to customers in recent days. The business was robbed at knifepoint on Monday in an unrelated incident. No employees were injured during the robbery, in which an undisclosed amount of money was stolen, according to Fort Dodge police. Ted Hammersley, who is accused of the holdup, was arrested immediately.

-Messenger photo by Chad Thompson
GreenState Credit Union, 1207 Central Ave., formerly First American Bank, opened for business recently.

The IDOB made the decision to block the transaction between the bank and credit union on the same day of the robbery.

Jeff Plagge, superintendent of the IDOB, explained the decision in a letter dated March 2.

“Because First American closed this transaction without obtaining my prior approval, I must act immediately and deny First American’s application,” Plagge said in the letter.

The IDOB received notice of First American’s intentions on Feb. 4. Plagge said the comment period for the transaction was scheduled to end today.

But Plagge said he became aware that First American and GreenState had already finalized the proposed transaction before that period was over.

The two firms did so “despite knowing that the approval of the Iowa Division of Banking was required,” Plagge said.

Banks and credit unions have different standards and regulations for proposed transactions.

Iowa Code requires that banks like First American adopt a plan for the acquisition of its assets and assumption of its liabilities by another state bank, national bank, or other financial institution insured by the Federal Deposit Insurance Corporation. The statute does not refer to credit unions as authorized purchasers.

The bank and credit union are to maintain separate records until the issue is resolved, according to Plagge.

First American Bank representatives John A. Fisher, president and CEO; and Richard Stark, chairman of the board of directors, declined to comment on the matter. The two referred questions to Des Moines Attorney Stephen Locher, of Belin McCormick.

A call to Locher’s office was not immediately returned Wednesday night. A statement from Locher is anticipated today.

Shields couldn’t speak to any potential penalties that would be imposed on either of the two firms.

In terms of penalties, Shields said, “We are working through that.”

“From our side of the transaction, we are working to resolve issues to make sure customers are not impacted negatively,” Shields said.

Shields could not offer a timeline on when there would be a resolution to the issue, but said “a number of different regulators are working on it.”

“We want to resolve it as soon as possible,” Shields said.