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It isn't often that 11 credit union CEOs lose their jobs and simultaneously say the move is a good one. But then again it isn't often that you encounter credit unions structured in the way the State Farm credit unions have been.

The Good Neighbor insurance giant had structured its credit unions in much the same fashion: as neighbors. But the company had also borrowed from Robert Frost, who observed, "Good fences make good neighbors;" in this case, the fence was around the field of membership. Each of the credit unions serving each of its 12 regions, respectively, had FOMs limited to State Farm employees in those regions. The formula worked, as the smallest of those credit unions has $152 million in assets.

All told, those credit unions have nearly $3 billion in total assets, all of which will be swept up into one institution if a proposed merger is approved and a new State Farm Federal Credit Union is formed. As is reported in the story on page 1, the CEOs of each of those credit unions will now become managers overseeing their respective operations and branches, but reporting to Tom Dewitt, CEO of State Farm Great Lakes, who will become CEO of the combined operation.

There is one other piece of uniqueness here that is playing a big part in smoothing the decision: all of the credit union CEOs are actually employees of State Farm Insurance, as are the board members, most of whom will be losing their seats. So when the company said it was backing the merger, the company's employees went along.

Still, those CEOs say they believe the move makes sense.

"My job will remain pretty much the same, with the only area impacted being investments to the extent we will be consolidating all of the investments," said Bruce Healey, CEO at State Farm Heartland in Lincoln, Neb. Healey said he currently oversees 8,000 members spread across his region, which also includes Minnesota, Wisconsin, both of the Dakotas, Nebraska and Iowa.

State Farm credit unions have always been unique in another regard, the composition of their portfolios and their pricing, as Healey acknowledged.

"We are a little bit different as credit unions go," he confirmed. "We're really more of an investment club. We have $170 million in assets and just $40 million in loans. The credit union pays very well. We're paying 4.25% on passbook savings and we're charging 4.9% on loans."

Although some of his responsibilities will be lifted with the merger, Healey said he does not anticipate spending more time trying to boost that loan-to-share ratio. Instead, he expects to dedicate his time to member service and compliance issues.

Healey said the board, of which he was a member, has been completely supportive of the move even though just one member from each of the merged State Farm CUs will become a board member of the combined operation.

"It did not really bother the board. We all recognize this is a company benefit and we don't want it to go away," he said. "Everyone understands this is a very good thing. We are giving up our positions on the board and we did enjoy making decisions. But in my opinion it's a good thing."

Healey's view is echoed by Terry Williams, CEO at the $167-million State Farm Mid-America in Newark, Ohio.

"Truthfully, I don't think it will make for a lot of change in what I do on a day-to-day basis," he said. "I will still oversee two branches and be responsible for those."

Williams, 17-year veteran of the credit union, said he went through another merger several years ago when State Farm realigned some of its zones, and that he was not surprised to see the current merger come about as it's been discussed for years. He said a memo sent to all company employees about the merger of the State Farm credit unions was met with all the response of actuaries at a Beige Convention.

There's a reason "It's A Wonderful Life" has become a cable-TV institution in the United States. No, it's not because American viewers like to break up in discussion groups to examine Jimmy Stewart's character George Bailey as an allegory for mankind and an afterlife. And it's not because of the yearning Americans increasingly have to live in small-town Bedford Falls. Instead, it's because so many want to have a just one moment in our lives such as that George Bailey has when he is at his lowest moment and suddenly all the good works he has done in his life are validated by the community, with townsfolk gathering in his living room to sacrifice whatever they can for him from their meager savings.

Very few people ever get such moments (in large part because very few deserve it), but one person will this week: Dave Chatfield. Chatfield, who is retiring as CEO of the California/Nevada leagues after 40 years in the movement, will be feted at the leagues' Big Valley Conference, and deservedly so. Has anyone within credit unions ever had such a diverse, extensive and extraordinary resume-and also not been fired?

In retirement, Chatfield plans to travel between homes in Alaska and Hawaii. But let's hope credit unions don't let him get too far away. There are, after all, a lot of Mr. Potters out there, and too few George Baileys.

Frank J. Diekmann is Editor of The Credit Union Journal.

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