NCUA shares merger resources, ideas in webinar with CU league prez

March 10, 2016

ALEXANDRIA, Va. (3/10/16)--Credit unions looking at mergers as a potential growth strategy were treated to a host of information at the National Credit Union Administration’s (NCUA) webinar on the subject. In addition to officials from the NCUA, the webinar featured credit union leaders, including John McKenzie, CEO of the Indiana Credit Union League,  sharing their stories about mergers.

According to the NCUA, 91% of credit union mergers are voluntary, and per the agency, voluntary mergers generally have better outcomes. Bob Jones, an NCUA economic development specialist, said reasons for credit union mergers include weak financial conditions, as a move to increase member services, or a field of membership disruption.

Likewise, the NCUA has a number of resources for credit unions examining the possibility of mergers, including:

  • Truth in Mergers guide for merging credit unions;
  • Merger and conversion manual;
  • Chartering and field of membership manual;
  • Part 708B of the NCUA’s rules and regulations; and
  • Merger partner registry;

Paul Nyman, a board member at Horizon FCU of Williamsport, shared how a local Pennsylvania credit union, facing a combination of factors including an aging membership and the loss of several large employers in the region, was able to merge with then Williamsport Area Healthcare FCU to become Horizon, thus ensuring members could continue to receive financial services at a credit union.

McKenzie explained how the concept of a network credit union. A network credit union option is designed to create a stronger organization, with advantages of economies of scale, local identity and local control.

Participating credit unions each retain an advisory board of directors and CEO, and specialized companies provide a broader base for nontraditional products like investment and insurance services.

Participating credit unions each retain an Advisory Board of Directors and CEO. The vision maintains local identities with standardization of financial practices bolstered by centralized support. Specialized companies/CUSOs provide a broader base for nontraditional products like investment and insurance services.

The Credit Union National Association has prepared a number of resources on network credit unions. The NCUA also released a legal opinion letter on network credit unions last month.

The NCUA will close caption the webinar and archive it, which will be available within the next three weeks.