Jolette's California CU Plans Palo Alto Merger
As of today, a California credit union merger now occupies a spot on the to-do list of Barry Jolette, the chairman of the World Council of Credit Unions.
The president/CEO of the 594 million San Mateo CU of Redwood City, now presiding over the joint WOCCU/CUNA 1 Credit Union Conference in Las Vegas, is working on an application to merge the $12 million Palo Alto Community Federal Credit Union.
The application to consolidate the nearby CU was filed two weeks ago with the California Department of Financial Institutions following long-running talks between the two CUs, said Jolette.
"Let me emphasize that we at San Mateo are not any kind of Pac-man credit union out there looking to make mergers. Our attitude has always been to do all we can to help out small credit unions," said Jolette.
In this case, the management of Palo Alto, which "like many small credit unions is struggling under what are becoming insane compliance burdens" approached San Mateo about merger possibilities, Jolette told Credit Union Times.
Like its peers, Palo Alto FCU, which lost $355,000 in 2009 and has 6.44% net worth, "wants to retain their own power" but in this kind of environment managers find the task overwhelming, Jolette added.
The fact is, said Jolette, "we are all struggling" whether it be in California or elsewhere. San Mateo CU, he said, is currently operating at 6.5% capital ratio "though we did make a $750,000 profit in the first half and expect to double that by year-end."
In some ways, he went on, the U.S. is following the path of Canada and Australia in CU concentration trends though "every country has different structure and conditions."
As for Palo Alto, he said that following regulatory and member approval, the merger should be completed by year-end.