MADISON, Wis. (2/4/16)--New research from the Filene Research Institute supports the validity of the Network Credit Union, a merger alternative for credit unions.
The Network Credit Union was inspired by a not-for-profit hospital system based in Indiana.
Collaborative merger models have helped credit unions reduce costs related to audit fees, league expenses, data processing, and bonds, according to Filene. Collaboration opens the door for employee sharing and expanded access to information technology and business development tools.
Smaller credit unions experience great efficiency gains in a time when the entire financial services industry is rapidly evolving.
The paper provides an FAQ as well as information about governance, strategy and challenges.
In 2014 the Indiana Credit Union League inquired to the National Credit Union Administration (NCUA) on the legalities of multiple group federal credit unions merging with certain conditions:
The NCUA Office of General Counsel deemed the Network Credit Union option currently permissible under the Federal Credit Union Act, NCUA’s Charter and Field of Membership manual, the agency’s existing letters to credit unions, and its legal opinion letters.
The new merger alternative was covered in the September 2015 issue of Credit Union Magazine.