Faced with a shrinking client base, Rhode Island Corporate Federal Credit Union is weighing a merger with New York's Empire Corporate Federal Credit Union, industry sources said.

In an interview, Rhode Island Corporate president Emile Bonneau Jr. said a merger was not imminent. But he added that since April the Warwick-based institution has been exploring its future direction, and merging with a larger corporate is one option being reviewed.

"We're in a situation where there's a limited number of credit unions we can serve," Mr. Bonneau said. "Everything's a possibility."

A corporate steering committee in late September will submit its recommendations to the board, he said.

Joseph Herbst, chief executive of Empire, could not be reached for comment. Bruce Beaudette, an Empire director who also ischief executive of Turbine Federal Credit Union in Schenectady, N.Y., would not comment on whether the two corporates were looking to merge.

The credit union population of Rhode Island was hit hard by the January 1991 collapse of Rhode Island Share and Deposit Indemnification Corp., a private insurer. The state closed 35 credit unions - later reopening 22 after the National Credit Union Administration agreed to insure them.

At the time of the crisis, $201 million-asset Rhode Island Corporate Federal had 67 members; it now has 46.

Smaller corporates - Rhode Island's ranks 33d among the 41 liquidity centers - are having trouble offering as wide a range of services as their member credit unions demand, according to industry analysts.

Survival could become tougher under anticipated NCUA regulations that would clamp down on corporates' investment powers and stiffen capital requirements.

For its part, Rhode Island Corporate has entered joint ventures with Constitution State Corporate Credit Union, Wallingford, Conn., and Central Credit Union Fund, Worcester, Mass., to offer item-processing services, Mr. Bonneau said.

Getting involved in other joint ventures is another option the corporate is looking at, Mr. Bonneau said.

"The point of the strategic plan is to look at all the options," Mr. Bonneau said. "At the moment the board has not made any decision as to the avenue we're going to take."

If the Rhode Island institution does decide to merge with Albany-based Empire - the nation's fifth-largest corporate with about $1.3 billion in assets - it will square with analysts' forecasts of wholesale consolidation among the industry's corporates.

The corporates in North Carolina and South Carolina since June have discussed merging, and a transaction could be voted on by the institutions' membership by early fall.

Rumors have surfaced of merger talks between Western Corporate Federal Credit Union, San Dimas, Calif., and Washington Corporate Central Credit Union, Bellevue, Wash.

Officials of both institutions have denied that any such discussions are going on. The two had discussed merging in the past, but Washington Corporate balked. Last year, Wescorp stepped up its marketing efforts in the Evergreen State, which it is chartered to serve.

Mr. Bonneau stressed that no decision yet has been made.

"We're a small corporate that's done well since the crisis" of the early 1990s, he said. "We provide great services to credit unions at very low cost."

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