When Arkansas Business reported earlier this month that Arkansas Federal Credit Union would be part of the consortium of lenders that Centennial Bank pulled together to provide a $17.5 million financing package for the Little Rock Tech Park, we thought that was true.
So did AFCU.
But after the deadline for submitting an individual loan bid passed, AFCU was reminded that bankers don’t play with credit unions.
The 10th-largest financial institution in the state as of June 30 — just a hair under $1 billion in assets — was uninvited from participating in the loan at the request of the Arkansas Bankers Association.
“Our request was to see if there was a possibility of replacing AFCU with one or more Arkansas banks that wished to participate in the loan package,” Bill Holmes, CEO of the ABA, told Whispers in an email.
“The request was made because some of our membership had read the article and asked, rightfully so, how the Little Rock Tech Park Authority could be a member of the AFCU. Congress granted credit unions a tax exemption so that they could meet the credit needs of people of modest means with a common bond. Credit unions were based on a simple concept, common bond, where members were from the same church, school, employer or even small community. The Tech Park is a stretch, well beyond that intent.”
Bankers also object to a tax-exempt credit union earning interest from a borrower supported by taxpayers via a sales tax approved by voters.
“Arkansas banks paid $258+ million in taxes in 2014,” Holmes wrote. “AFCU and 80 other Arkansas credit unions paid $0.00 in taxes. An individual taxpayer pays more in taxes than all credit unions combined.”
(There are only 59 other credit unions chartered in Arkansas, but point taken.)
Among the lenders joining Centennial: First Security Bank, Arvest Bank, Simmons First National Bank and Bear State Bank.
AFCU has not given up.
“AFCU looks forward to submitting very competitive bids on future phases of the Little Rock Tech Park as one of our missions is to make a difference in our communities by dedicating ourselves to change the world we live in,” CEO Rodney Showmar said in an email.