Complete Merger Before Tackling System, Vendor Conversion
Converting systems and vendors of the merging credit union to those of the continuing credit union concurrent with execution of the merger is not generally the best course of action. There is no requirement to tie the two events together and there are several reasons to treat them independently.
The continuing credit union assumes control of and responsibility for the assets and liabilities of the merging credit union on the effective date of the merger. There is no requirement that there be immediate changes in the operations of the merging credit union. Rates, fees and policies at the merging credit union may change on the effective date of the merger, but few if any of the changes require new systems or vendors.
It is generally impossible to schedule vendor conversions between the approval of the merger and its execution, because the maximum interval is 120 days. Manual conversions also require lead-time. Scheduling a conversion before merger approval introduces risk that the conversion will need to be rescheduled. Trying to synchronize the events adds unnecessary stress and anxiety.
Assembling the merger package, performing due diligence, communicating with members, and aligning the two organizations requires a great deal of energy and attention during the merger process. Postponing tasks that can be postponed allows staff to focus on urgent matters.
As operational alignment between the credit unions progresses, better decisions about which systems and vendors should be retained will be possible. It may well be that some of the survivors come from the merging credit union. It is hard to be open to these possibilities when there is extreme time pressure to get the conversions done.
Planning for system conversions can begin at any time. Execution of the conversions should be done with as few non-essential time constraints as possible.
Carol Stryker is a long-time credit union veteran and consultant with SymbioticSolutions, Houston. She can be reached at 713.252.3361, or at CarolStryker@symbioticsols.com.