Calif. and Nevada Trade Groups Plan to Consolidate Services

The borders between state credit union leagues continue to blur as California and Nevada join a surging tide of consolidating trade groups.

If it proceeds, the alliance would give credit unions in Nevada access to more services while expanding the California trade group's membership base.

"It's a win-win," California Credit Union League president David Chatfield said in an interview.

The boards of the California and Nevada leagues on May 19 approved letters of intent to consolidate services. Mr. Chatfield declined to call the arrangement a merger, saying much nuts-and-bolts work remains to be done.

If successful, it could guide the way for future alliances. In an interview, Nevada Credit Union League president Glen Reese said the relatively small trade group was hard pressed to meet the growing demands of its membership for products, services, and education at an affordable price.

"This allows the cost of membership in the league to be more reasonable," Mr. Reese said. There are 32 credit unions in Nevada with $1.6 billion of assets.

Mr. Reese said the problem he faces is not unique. He predicted further alliances and outright mergers among industry trade groups.

Other association chiefs agree.

"I think there will be more sharing of services between leagues, and in the coming years there will undoubtedly be consolidation in the service areas," said Carroll D. Beach, president of the Colorado Credit Union League.

In fact, this partnership would not be the first. The New Hampshire Credit Union League and Rhode Island Credit Union League maintain their own boards but they contract for management services from the Massachusetts trade group.

State leagues in North Dakota, South Dakota, Wyoming, Montana, and Idaho formed a corporation two years ago called the Mountain Plains Service Group to provide products for their members.

"On a regional basis, leagues are looking to do things that are not feasible on a state-by-state basis," said Donald P. Couch, president of the South Dakota Credit Union League.

Such collaboration is no sure ticket to success, however. Even by cooperating, leagues might be hard pressed to compete with other vendors.

"We looked at statement printing and found other providers could do it more economically," Mr. Couch said.

Mountain Plains is continuing to research possible products but hasn't yet introduced anything, Mr. Couch said.

Beyond offering affordable services, trade groups must cooperate more as the interests of their member credit unions cross state lines, said Gary Gores, president of the Ohio Credit Union League.

"Trade associations have been pretty territorial and parochial in the past," Mr. Gores said. "But Ohio has five contiguous states. To think we don't have a tremendous amount of activity outside the state isn't realistic."

The Ohio league is planning to offer services such as automobile leasing and mortgage lending with the Pennsylvania Credit Union League. It also is approaching the Michigan Credit Union League with an eye toward joint offerings.

Mr. Gores predicted that soon there would be 10 or 12 "pods" of leagues that would work together in varying degrees.

Mr. Chatfield said it is unlikely that state leagues will vanish. A local presence is needed to represent credit unions before state legislatures and regulators.

"It doesn't work well to have carpetbaggers come in from out of state and testify at a hearing," Mr. Chatfield said.

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