Merger is a dirty word in the world of small credit unions-the definition here being under $10 million-and frequently relating to church credit unions that may or may not be community development credit unions.
As they are harassed-perhaps a harsh word-more and more these days for not growing their memberships or loan portfolios or at times higher delinquencies, they don't know how to fight back.
They are gentle folk who are doing what their mission said many years ago when they were first chartered. They are there to help their members-good credit is a secondary consideration. They hark back to the days of the little man under the umbrella, when someone who was sick, jobless or in danger of being evicted was not looked at as high risk.
Frequently these small credit unions have high net worth. Remember HR 1151 when they were bused to Washington D.C. to show the bankers and Congress who the credit union movement really was?
And what of the SCUP Program that the NCUA created just for them? If the regulators thought them an asset then, why have they changed their minds? Why is "We want to help you" being replaced by "We want to merge you?" The NCUA has put out a white paper that instructs examiners on how to evaluate what they find in CDCUs, but it is largely ignored.
It is well-known by many of us who have taken in mergers in the past, that only rarely do the members of a merging credit union stay around-even if they voted for the merger. Maybe merging is tantamount to liquidation.
Small church credit unions pose little threat to the NCUA, albeit they may irk their examiners. Their members can ill afford to lose them. The loan shark is right around the corner.