Not All CU Mergers Are Bad

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As I was just browsing the latest CU Journal, I was somewhat surprised to see the logo of Salmon Falls CCU in the merger “funnel” (CU Journal, July 7).

As I am now the VP-Branch Administration for Service Credit Union, I feel that some things haven’t been mentioned in the article.

First, I’ve been in the industry for 20 years at credit unions as small as $3 million and now as large as $1.2 billion.

The implication that a small credit union is too quick to merge is a fallacy. For SFCCU, I was employed there five years. The merger option was indeed a last resort; however from an economic standpoint it made a lot of sense–with 25% of our loans in variable rate HELOCs and declining income with expenses increasing, it’s amazing how fast 9% capital can decrease.

Further I was very surprised at the lack of information regarding small credit unions. Regulatory Compliance is a huge burden. Small CU CEOs are the BSA officer, the HR officer, the teller, the web designer, the marketing person, etc. He/she is the point of contact for everything. Don’t you think that this just might be a very difficult position to be in?

All I can say is that I’ve grown up in the credit union industry, starting from high school as a part-time teller up to CEO of two small (around $10 million) credit unions. I love credit unions and the philosophy they have. All that time I was brought up on the fact that “mergers are bad.” As the VP-Branch Administration for Service Credit Union, I can tell you that can’t be farther from the truth.

As a small credit union, Service was one of the “big boys” but they always treated us with respect and always were ready to lend a helping hand. I never for one minute felt that they were just doing that in case of a merger, but that they had a heartfelt desire to help all credit unions. We shared the same philosophy at heart…and at the end of the day, when the economic writing was on the wall, and after a lengthy RFP process, our board and I all agreed that Service CU offered many more products and services that we, given our lack of resources and earnings, could not give, such as 24/7 call support and seven-days-a-week banking.

While no one is advocating strong small to medium-sized credit unions to merge, I first hand can understand the day-to-day issues these CEOs have to deal with and can understand the reasons why they merge.

Let me just close by saying on a personal level, the merger made sense. My hair isn’t nearly as white as it was four months ago. On a member level, it really made sense–our members now have 32 locations worldwide where they can do their banking, not to mention access to the Shared Branching network. Mergers just aren’t all bad–they can work for both the acquiring credit union and the acquired credit union if both know what they are getting into.

Dan Clarke,

VP-branch administration,

Service CU, Province, N.H.


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