Three Things To Expect During A Credit Union Merger

Credit union mergers are more commonplace now than ever. They happen for different reasons. Some mergers are vehicles for growth. Others are a means of survival. Some mergers even happen as a means to make network access more efficient for members. Whatever the reason, it can generate a feeling of uncertainty. You might feel a bit out of control until the process is finished. Knowing what to expect can make for an easier transition. Following are three things to consider should your credit union consider a merger.

1. Employee Growth. While it is true, the number of employees may increase during a merger, that is not what we are alluding to here. Many employees find their career really taking off during a merger as new positions are created due to the increased size of the credit union. This is fantastic news, right? Yes, it is. However, it is important to keep in mind that during the merger responsibilities may broaden, or your job title may change completely until all posts can be adequately staffed.
2. New Investment Opportunities. During a credit union merger, new investment opportunities may arise for employees and members. It is important to recognize your funds and investments remain safe and secure throughout the entire process. Management will usually reiterate this to employees, while staff are tasked with keeping members in the loop. Things like your 401k, and other retirement investments, remain unaffected. However, there might be new investment opportunities available to you as a result of the merger. The same applies for members.
3. Forms and Processing. These items can change during a merger, but it is not necessary. Oftentimes, lending systems are either neglected or overhauled during a merger. New systems can be frustrating. They are unfamiliar and laden with hours of training. They can also generate a fair degree of inefficiency until staff get acquainted with the intricacies of the new system. Make sure you work with a forms vendor with extensive experience in merger to ensure forms are compliant and up to date regarding state and federal regulations. Furthermore, during your due diligence ensure forms will easily integrate with your data processor.  Your forms vendor can be of great support during the due diligence process.

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Keeping these three things in mind during a credit union merger will prepare you for the road ahead. The typical merger takes between 6-9 months so once the journey begins, just buckle up and hold on. There will be hiccups and obstacles along the way, but overall, the process should smooth out towards the end. Knowing what to expect can keep your mind sharp and your work focused during the transition. And while a merger may not be on the drawing board for your organization right now, the potential is always there. Last year saw 54 mergers approved by the NCUA in the first quarter alone. 2017 is shaping up to see its own fair share of mergers.

There will be so many moving parts in the area of regulatory updates, new staff positions and policy changes. Partnering with a vendor with merger experience ensures a smoother process for all involved.

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Guest Author: Jeff Osburn, Director of Client Services, Oak Tree Business Systems, [email protected]

Oak Tree has been in the credit union business continuously for over 30 years, developing, supporting and maintaining lending and operational documents for credit unions in all 50 states, Canada, Puerto Rico and the Virgin Islands.