Tip:
Highlight text to annotate it
X
WE'VE ALL SEEN THE HEADLINES.
HOW CONCERNED SHOULD YOUR CREDIT UNION BE?
MERGERS BETWEEN CREDIT UNIONS ARE COMMONPLACE IN THE
INDUSTRY TODAY.
AS IN ANY OTHER BUSINESS OR INDUSTRY, SOME ARE SUCCESSFUL
WHILE OTHERS ARE NOT.
THIS BOARD OF DIRECTORS' VIDEO WILL EXPLORE THE ISSUE FROM
THE MERGING CREDIT UNIONS PERSPECTIVE.
WE WILL EXAMINE CURRENT TRENDS IN CREDIT UNION MERGERS,
DETERMINE WHEN A MERGER IS IN THE BEST INTEREST OF THE
CREDIT UNION, OR NECESSARY TO CONTINUE OPERATIONS, AND
DISCUSS HOW TO NEGOTIATE A MERGER AGREEMENT THAT IS IN
THE BEST INTEREST OF THE CREDIT UNION. MERGERS ARE
TYPICALLY STRUCTURED LIKE THIS: THE CREDIT UNIONS
RESPECTIVE MANAGEMENT TEAMS FIND A MERGER PARTNER.
THIS IS USUALLY DONE THROUGH PROFESSIONAL CONTACTS
OR BY NCUA.
NCUA MAINTAINS A REGISTRY OF CREDIT UNIONS INTERESTED IN
MERGING WITH OTHER CREDIT UNIONS.
MANY MERGER ISSUES CAN BE NEGOTIATED BETWEEN THE TWO
CREDIT UNIONS.
MORE DETAILS TO FOLLOW LATER IN THIS VIDEO.
NCUA AND THE STATE SUPERVISOR IF ONE OF THE MERGING CREDIT
IS STATE CHARTERED, WILL CONSIDER THE MERGER PROPOSAL
BASED ON A VARIETY OF FACTORS LIKE: CHARTER TYPES, FIELDS OF
MEMBERSHIP, NUMBER OF MEMBERS AND FINANCIAL CONDITION OF THE
CREDIT UNIONS.
A MEMBERSHIP VOTE, BY THE MERGING CREDIT UNION, MAY BE
REQUIRED IF NCUA APPROVES THE MERGER, THE SURVIVING CREDIT
UNION ASSUMES THE ASSETS, SUCH AS LOANS, INVESTMENTS,
EQUIPMENT, AND BUILDINGS AS WELL AS THE LIABILITIES AND
SHARE ACCOUNTS OF THE MERGING CREDIT UNION.
AT THIS POINT THE MERGING CREDIT UNION NO LONGER EXISTS.
A MERGER CAN AND SHOULD BE PART OF THE PLANNING PROCESS.
DO REMEMBER, MERGERS DO NOT NECESSARILY EQUAL FAILURE.
THERE CAN BE MANY BENEFITS TO A MERGER, EVEN FOR THE MEMBERS
OF THE MERGING CREDIT UNION.
THE BENEFITS OF A MERGER CAN INCLUDE: IMPROVING THE CREDIT
UNIONS FINANCIAL CONDITION THERE ARE CLEAR ECONOMIES OF
SCALE DUE TO SIZE.
THE LARGER CREDIT UNION THAT RESULTS FROM A MERGER CAN TAKE
ADVANTAGE OF THESE TO IMPROVE THEIR FINANCIAL CONDITION.
HELPING TO EXPAND MEMBER SERVICES FREQUENTLY THE
SURVIVING CREDIT UNION IS MUCH LARGER THAN THE MERGING CREDIT
UNION AND LARGER CREDIT UNIONS TYPICALLY PROVIDE MORE
SERVICES. EXPANDING FIELD OF MEMBERSHIP FOLLOWING THE
MERGER, THE SURVIVING CREDIT UNION SERVES
BOTH FIELDS OF MEMBERSHIP.
ENSURING SUCCESSION PLANNING SMALLER CREDIT UNIONS CAN HAVE
DIFFICULTY ATTRACTING QUALIFIED STAFF AND VOLUNTEERS
MERGING CREDIT UNIONS MAY NEGOTIATE RETAINING THEIR NAME
AS "A BRANCH OF...", AS WELL AS KEEPING THE OFFICE LOCATION.
IN THE NEXT SECTION WE'LL TALK ABOUT: RECENT MERGER TRENDS
THE DIFFERENCES BETWEEN VOLUNTARY AND INVOLUNTARY
MERGERS AND WARNING SIGNS THAT IT MIGHT BE TIME FOR
MANAGEMENT TO CONSIDER MERGER .