Maryland/DC CUs Plan Focus Groups On Merger with NJCUL

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GREENBELT, Md. — As the Maryland/DC CU Association prepares to hold focus group sessions with its membership on the proposed merger with the New Jersey league, sources suggest the association may encounter opposition to the consolidation during the meetings.

Sources told Credit Union Journal that some members of the Maryland/DC league, which is currently without a CEO after Michael Beal resigned to head the Missouri CU Association, oppose the merger. Sources have stated that a number of CEOs believe MDCCUA is choosing an "easier" road by merging and having the New Jersey Credit Union League head the combined entity, rather than finding another president.

But another person said that is not the case.

"I can tell you this is not the easier way out," said Chris Conway, CEO of the $350-million Educational Systems FCU here, who chairs the Maryland/DC league's committee performing due-diligence on the proposed merger. "In fact, I had been asked that question by one CEO. I told him the due diligence committee has to do a lot more reading, investigating, and attend a lot more meetings to evaluate this merger than going through a CEO selection process."

Conway noted the league has received e-mails from a "small minority" of members, some asking for more information and a few expressing concern over the league possibly losing its identity with the regionalization. "Part of it is just a result of people not knowing where we are in this merger process. This is not a done deal. We are considering this, starting our due diligence, and evaluating whether this merger could be built."

MDCCUA is preparing for a series of focus group meetings in both states over the next few weeks to learn what its members want from a regional association. "We want to hear questions they have about how a regional association can better serve them," Conway said. "Through collecting that information we hope to have a good idea of what a new regional association would look like."

Conway said the league will talk to member CUs about the advantages that come from combining with the New Jersey league, such as greater depth and effectiveness in areas of marketing, training, and legislative and regulatory advocacy, as well as greater economies of scale that will drive costs down and potentially lead to smaller dues increases.

Evan Clark, CEO of the Washington, D.C.-based Department of Commerce FCU, backs the league improving operating efficiency and supports the merger. "There is tremendous over-capacity in the financial industry today. So if credit unions are consolidating, why should there not be fewer leagues? I have cut my staff by 10% over the last year, and I want to see the same sorts of things from those who provide services to credit unions. Leagues, or any organization that supports credit unions, need to provide services in the most cost-effective way."

Clark said he was not concerned about the league losing its identity through the merger: "I don't care as much about identity as I do efficiency."

Conway told Credit Union Journal that the league is looking closely at ways to preserve a local feel with the merger, including keeping offices in DC and Maryland, in addition to New Jersey. "Any time you become more regional you want to make sure you maintain that local presence. People want to feel like they can touch their association. All of the league's board members are committed to making sure there is a local feel and presence if the merger goes through."

While Conway is confident member CUs will support the consolidation, he agreed that the league will find out quickly where its members stand when it holds the focus groups. "We are not waiting for them to ask questions. We are inviting them to tell us what they think so we can really get a sense of what their concerns are. Sometimes these things are just better handled face-to-face."

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