Two Southern California credit unions have leveraged their difference in size difference in a unique collaboration that supports sustainability and engages the membership of both organizations.
With both credit unions’ memberships geographically overlapping each other in and around the City of Commerce just five miles from downtown Los Angeles, a plan to gain efficiencies and cost-savings through an uncommon relationship was a logical choice, the California and Nevada Credit Union Leagues reported (CU Weekly Nov. 15)
Certified FCU, a division of Vons CU, welcomed the much-smaller Printing Industries CU in August to share its branch location--a discussion six years in the making that will save Printing Industries roughly $80,000 annually since it was able to close its former Commerce, Calif. branch. Vons had already planned to downsize Certified’s large unneeded branch space after that credit union merged into Vons in 2010. It was an office Printing Industries previously borrowed time to time, a circumstance that serviced as a starting point for the conversation.
“Many in our industry often assume talks between a small and larger credit union are merger-related, but it doesn’t have to be that way,” said Susan Conjurski, CEO of Printing Industries. “Both credit unions’ signage is on the windows, doors and ATMs, and both will be represented on the building’s exterior. You’re probably going to see more of these types of partnerships as smaller credit unions look for ways to increase scale, savings, and product offerings through bringing together back-office resources.”
Vons is headquartered in El Monte and serves grocery-chain employees. It has six branches throughout Los Angeles, Orange, and San Diego counties. Printing Industries serves printing workers and has a branch inside its Riverside headquarters in addition to the Commerce location.
The collaboration is mutually beneficial. Certified FCU will gain a new branch presence next year at Printing Industries’ site in Riverside. It will be Vons’ first physical location in the Inland Empire region of California. The Certified division of Vons serves employees of Hispanic supermarket chain Cardenas, which has more than two dozen stores across San Bernardino and Riverside counties.
“We wanted to help Susan’s small credit union,” said Steve Weakley, CEO of Vons CU. “They were just trying to survive when she was hired as CEO. Cooperating with each other when we can is our purpose and what we’re here for. There are so many small credit unions being merged right now, so we wanted to help at least one as long as it was financially viable.”
Another plus: Both credit unions are on the CO-OP Shared Branch network. “The thing about the City of Commerce is, the population more than doubles in the daytime because it’s a business community,” Weakley said. “That’s what makes shared-branching work for them and us at this location.”
Besides significant savings on retail space, tellers and member service representatives from either credit union at both branches will help offset traffic at peak times and minimize members’ wait time. If the collaboration is successful, Conjurski might consider using this shared-space model at Union Pacific California Employees FCU in Los Alamitos where she also serves as interim CEO.
The independent spirit behind this shared-space strategy is loosely similar to what the NCUA and Filene Research Institute call a network credit union, which provides for a personalized tweak to the traditional merger option. The merged-in credit union (or “network credit union”) continues operating under its former name but with the following disclaimer: “a division of (parent credit union).” The continuing credit union appoints an advisory committee made up of merged-in staff leaders, and also reserves one seat on its nominating committee for a merged-in employee as well (click here for synopsis and full report).
In the case of Printing Industries and Vons, no merger discussions are in the air--only talk of a strong bond with aligned back-office and member-facing interests.
“This is something special,” Conjurski said. “The fact that both credit unions are healthy speaks well to what we can accomplish together. But it really goes back to the cooperative spirit that our industry is all about. It’s credit unions helping credit unions.”