WASHINGTON - Has the historic credit union business model of borrowing short, lending long and living on the spread become passé? In the past, fee income helped to make up the difference, but that’s proving to be hard to do as well.
For small credit unions–assets of $20 million and under–the environment is especially troubling. CEOs of these organizations are looking at their thin margins, the flat yield curve as well as a looming recession, and mergers are becoming an attractive option.
Scan the headlines of the trade press and the impression given is that mergers are increasing and are the only option for struggling credit unions, and that those mergers are always a path to efficiencies and economies of scale. But a closer look reveals that the reality is south of these impressions.
Check out the related links at right for in-depth report into the results of, the reasons for–and the alternastives to–credit union mergers. (c) 2008 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved. http://www.cujournal.com http://www.sourcemedia.com
