Empire Corporate Federal Credit Union, which helps credit unions in New York and Rhode Island meet their liquidity needs, will absorb New Jersey's Garden State Corporate Central Credit Union on Jan. 31.

The deal has been approved by regulators and the corporates' member credit unions.

The merger would make $1.4 billion-asset Empire the country's third- largest corporate, up from fifth, according to Callahan & Associates, a Washington-based consultant firm.

Garden State, based in Hightstown, is 19th with $383 million of assets.

The deal is the latest step in the consolidation of corporate credit unions, a process expected to continue.

Nearly every state has a corporate; industry analysts predict that ultimately only a few regional powers will survive. Albany-based Empire this year absorbed the Rhode Island corporate; last year the corporates of North and South Carolina merged.

Empire officials said they have no plans for further mergers, but "if something came up that would benefit our membership, we would certainly consider it," said Joseph Herbst, chief executive.

Garden State, one of the smaller corporates, needed a partner to remain competitive, said its chief executive, Gerald Murphy.

Mr. Murphy, who will not hold a position at Empire, said the two corporates had discussed merging for three years. "We felt this is what we needed to do to compete," he said.

He added that Garden State's action should cause other smallish corporates to reevaluate their strategic direction.

There are 38 corporate credit unions, which provide investment, liquidity, and correspondent services to the country's nearly 12,000 credit unions - services similar to those that bankers banks provide. But analysts have long predicted consolidation, saying most corporates are too small for necessary economies of scale.

One study proclaimed that corporates must hold least $600 million of assets to remain competitive; as of Sept. 30, only 13 passed that test, according to figures from Callahan.

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