Best Practices for Merging CUs

OSCUI brochure helps CUs negotiate a merger contract that serves members.

July 1, 2014

NCUA’s Office of Small Credit Union Initiatives (OSCUI) issued a new resource in May to assist credit unions in navigating the merger process.

The brochure, “Truth in Mergers: A Guide for Merging Credit Unions,” is designed to help credit unions recognize when a merger is in their best interest and how to negotiate a merger contract that serves members as well as employees.

Incorporating the lessons from a review of more than 430 mergers during an 18-month period, the brochure provides a framework for managers and directors to discuss a credit union’s future direction. It helps credit union leaders:

  • Understand trends in credit union mergers;
  • Determine when a merger makes financial sense or, in the worst circumstances, is necessary to continue operations; and
  • Negotiate a merger agreement that best serves the merging credit union’s interests.

“Every strategic plan should include contingencies, including when a merger is worth considering,” OSCUI Director William Myers says in a press release. “The critical first step is recognizing the early signs that a credit union’s long-term viability might be at risk. A credit union still in sound financial condition has more options when it comes to merger partners and is in a better position to negotiate a contract than a credit union in a deteriorated financial condition.”

 In addition, NCUA’s Credit Union Merger and Conversion Manual provides detailed information about how to conduct a merger once the credit union has decided to take that course of action.