What Are the Members’ Benefits in a Credit Union Merger?

To those on the outside, a credit union merger can seem like a scary proposition. When you and your board position your credit union for a merger with another, one of the major concerns is how members will benefit from such a move.

The Reason for the Unification

Many of the benefits of a credit union unification can come from the reason for the merger. Credit union fusions are often driven by need. Those needs can include,

• Compliance with new regulations
• A need for succession planning for CEO or Board
• A decline in earnings
• A decline in members
• A need to expand offerings

Really, all of these reasons can benefit members as a whole, but they benefit members in different ways. Mergers makes both the credit unions involved stronger, with more options to offer members.

What Does the Member See?

Your members, who only peripherally see what goes on with mergers, may feel as if what they’re witnessing is a bank-like power move. It is important to let them know that a merger does not transform a credit union into some other kind of business.

It is still a credit union and still operates under the same credit union rules and regulations. They are still members of the service they love.

• Accounts are still insured
• Rates will not suddenly change
• Branches will remain open
• Access to funds will work as normal

Any changes that do occur will come with plenty of notification to prepare members. And while you are informing members of the things that will stay the same, you can also let them know about the benefits they will gain.

• More locations
• More technology
• More products and services
• More funds for loans

Depending on the details of your merger, there are even more possibly benefits for members such as lower interest rates on loans and higher rates on deposits.

Is a Merger in the Best Interest of Members?

No matter the benefits gained from a unification, the question of its necessity is always there. Sometimes two credit unions coming together can seem like it is in the best interest of the credit union itself, rather than the individual members. However, members are always at the forefront of what makes mergers a practical solution.

If your credit union is,

• Stagnating from a lack of new business
• In need of fresh capital
• In danger of failing
• In need of new management or directors
• Facing new technology investments
• Needing new or updated facilities
• Lacking focus and direction
• Or, looking to obtain a competitive advantage through scale

Then a merger will benefit both the credit union and its membership. After all, members are what keep a credit union afloat. When membership declines or remains stagnant, then members suffer.

They have higher interest on loans, when they can receive a loan at all. They have lower interest on deposits. They do not have access to modern online services. They have no real breadth of options when it comes to financial products.

And yet, these members do not want to leave behind their credit unions in favor of a bank. You owe it to those loyal members to figure out a way to keep the credit union viable and operational. Mergers facilitate that. It’s all about the members.

Making a Change for the Better

There’s a lot involved with mergers that can affect your credit union in profound ways. These changes in the way you do things are often a challenge. You and your board will have to decide if you’re ready for those changes.

However, when it comes to the members, nothing should change, and nothing should destroy their faith in their credit union. The only kinds of changes they should have to go through are changes for the better.

A merger can be a bridge to a brighter future.