Two small Wisconsin credit unions, fearing they could not comply with impending Truth-in-savings rules, voluntarily merged with larger institutions in November.
The state-chartered, federally insured institutions cited compliance with the rule, which was adopted in September and eliminates low-balance accounts, as their reason for merging with larger credit unions, said Paul Schumacher, deputy director of the National Credit Union Administration's midwestern region.
Marengo Community Credit Union, which had $167,000 in assets, merged with Mellen Community Credit Union, Mellen. The latter has $2.8 million in assets.
Hawthorne Credit Union cited the regulation and weak profitability as its reasons for merging. The $64,000-asset institution merged with Douglas County Credit Union, Superior, which has $1.8 million in assets.
The regulation, effective Jan. 1, 1995, requires credit unions to offer daily-balance or average-daily-balance accounts. When the NCUA adopted the rule, many in the industry worried that smaller credit unions lack the staff and technology to handle such accounts.
