Forms Integration and Credit Union Mergers

Forms Integration and Credit Union Mergers | What You Need to Know

Maybe water cooler talk has you curious. All it takes is one whisper of the word “merger” for the rumor mill to crank up. And while mergers are not bad in and of themselves, they are disruptors. Credit union staff and members may be a bit uneasy during the transition. Forms, accounts, debit cards… will they change, or remain the same? Furthermore, as far as forms integration is concerned, which forms will be kept and which forms will go away? Keep reading for the answers.

Also, you may want to bookmark this post for future reference. Mergers are increasingly becoming more common. Just last year we saw the number tick up. In June of 2018, the NCUA approved 14 mergers. By September, that number jumped to 22. It is best to be prepared with information, should you find yourself in the middle of a merger this year.

Forms Integration and Mergers: The Surviving Credit Union is Key

When credit unions merge, forms and disclosures integrate from under the umbrella of the surviving credit union. Even if the non-surviving credit union keeps the same name, forms will need to be addressed as they will now be a member of the surviving credit union family. So what does this mean for your forms? There will be changes.

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In a merger, a credit union may be converting from federally insured to privately insured, or state charter to federally insured, so compliance and lending products offered to the field of membership would need to be decided upon by the board of directors. For example, a loan classification and complete verification of share and loan accounts is required. Custom document packages give the credit union the flexibility to add/remove lending documents following membership requirement guidelines. Prepare before your merger and have a smooth transfer. Don’t make any document changes until the merger is approved.

Membership Document Changes

At times, the individual share and loan accounts of the merging credit unions may be overruled, and current credit union disclosures would need to be provided to members. The current field of membership determines what lending packages are changing.

For instance, members may end up receiving new debit cards during the merger. This, in turn, may affect some of your membership documents. It may be as simple as providing a Change-in-Terms Notice rather than providing new disclosures. Once credit unions merge, it is not uncommon for these disclosure forms to change:

  • Membership Agreement
  • Account Agreement and Disclosures
  • Privacy Policy
  • Truth in Savings
  • Electronic Services Agreement

Loans, Credit Cards, Debit Cards, and Accounts

Other things change, as well. For instance, debit cards and credit cards from the non-surviving credit union will cease to exist after a certain point. Of course, any checks associated with the non-surviving credit union will go away at some point, too. In addition, membership documents will need to be updated as account names will change and others may no longer be offered.

However, loans usually survive a merger. Members are allowed to pay off their existing loan under the same terms set forth by the non-surviving credit union. However, after this they must apply for new loans under the new loan services offered by the surviving credit union. So in this case, it’s not a matter of revision. It’s simply a matter of switching over from using one lending document package to another.

And with a merger, it is possible that some products may not be offered by the surviving credit union. An example of this would be insurance premium loans. Also, some other personal account options may cease to exist as the surviving credit union may have similar member accounts or better options overall. Loan portfolio growth is key to new credit union mergers.

While this may seem overwhelming, one of the key components could be your data processor. New products must be inserted into current disclosures of the surviving credit union. Therefore, it is important to have a forms provider who has a good relationship with your data processor. Your data processor will need to determine which fields will transfer over to new forms and lending packages. Your forms and disclosures provider will help with the process.

Form Vendors and Forms Integration

Search for the top forms supplier for the industry; a vendor who has solid relationships with data processors, and is very familiar with the integration process as it relates to mergers.

In prior credit union mergers and acquisitions, strong loan portfolio is key for expanding services, while consolidation reflects on poor financial condition caused by a non-performing loan portfolio. Last year, Fox Communities merged with two different Green Bay, Wisconsin-based credit unions — Horizon Community Credit Union and Harbor Credit Union — which helped the credit union post 17.6% membership growth in 2017 and 21.4% market growth.

A vendor who makes sure your credit union forms remain compliant with all state and federal regulations during the merger process is essential. It can be confusing once a merger timeline is established. You need a vendor who works to make sure your forms are integrated properly at every stage of the process. After all, we feel the goal of any merger should be one that benefits the credit union and members by maintaining a posture of efficiency. This minimizes merger pains and ultimately fosters loyalty and contentment among members and staff.

Therefore, don’t leave credit union membership and lending forms integration to chance. Contact your credit union vendor supplier.

Richard Gallagher, CEO, Oak Tree Business Systems
Richard Gallagher (Guest Author)
CEO at | + posts

Richard Gallagher, CEO of Oak Tree Business Systems, Inc., Big Bear Lake, Calif., is no stranger to the credit union industry, having spent 26 years as senior executive where he oversees forms compliance, credit union merger guidance, expertise and policy considerations and is one of the pioneers of digital forms conversion and data linking/integration for credit unions. With 35+ years of experience with forms for credit unions, Oak Tree Business Systems will be with you from the start to finish, until your merger is complete.