WASHINGTON — When FDIC FCU and NSF FCU officially combine operations here June 1, it will be under a new name and a new business model to which it is hoping to attract other credit unions.
Effective on that date the two credit unions will begin operating as Partnership FCU. By that date numerous back-office operations will have been merged, most of the senior management team at NSF FCU will have moved to new positions within Partnership, and a new brand will be apparent to members in branches and online.
Theresa Mann, CEO of the $74-million FDIC Employees FCU, which serves employees of the bank insurance fund, said the CU had been actively exploring its growth options for some time before formulating its current plan in the summer of 2007.
"The idea was that we would collaborate with other similarly situated credit unions, credit unions with a single sponsor, of similar size and with growth challenges," Mann said, explaining the proposed model is based on mergers and back-office consolidation, with staff and management largely retained. The plan calls for individual branches to be branded similarly, but each would seek to respect the flavor of that particular FOM.
In January of 2008, FDIC FCU led a meeting of Washington-area CUs where it made its proposal. While Mann said several participants expressed interest, only Alexandria, Va.-based NSF FCU (which serves the National Science Foundation) moved forward. The $31-million CU announced last year it would merge with FDIC FCU.
"Merger is a big word," acknowledged Mann. "A lot of credit unions pursue collaboration and there are a lot of ways to do it. We felt this was one way to achieve economies of scale. There was a lot of interest, and other credit unions said they had mentioned the merger word during their planning sessions. But a lot of them were not at the same place we were. We will keep the door open."
The FDIC FCU board is comprised of FDIC employees, and Mann said the decision to move away from that name was not easy. "Absolutely they were cautious, but they also believe that in order to continue to offer competitive products and service" such a move was necessary.
FDIC FCU and NSF FCU are in the process of consolidating IT, HR, training and other functions. The total of four branches will continue to operate and now be open to all members. "The individual branches will be run with integrity and with a healthy respect for the organizations they serve," said Mann. "They will be operated consistently, but will celebrate the uniqueness of the (respective) FOM."
The name change and related branding efforts were created by Paul Lucas, a Fairfax, Va.- based consultancy.
