Calling its experience a new mark of regulatory delay, the $65 million SPE Federal Credit Union in Pennsylvania completed a merger of a healthy and neighboring CU this week “and it only took two years,” according to its frustrated CEO, Russell Brooks.
The delay in Brooks’ estimation was apparently the result of both “the NCUA turmoil on the corporates” and last year’s change in field of membership/community charter rules and how they applied to SPE’s planned acquisition of the $11.9 million Huntingdon County FCU.
“We’ve discussed a possible merger for years when this multi-SEG CU lost its original sponsor and the credit union had no succession plan for their senior executive who was retiring and so they began talking to us,” explained Brooks.
Once the paperwork was filed with NCUA, hang-ups emerged over community charter boundaries and “what the NCUA wanted us to do.” Then the application apparently got waylaid during NCUA’s preoccupation with the corporate crisis and now “it’s two years later,” said Brooks who said he felt like he was “riding a bronco.”
He even put up a sign on his office wall, “Keep Calm and Carry On.”
The formal merger was made effective July 1 though it may take another six to 12 months to complete the conversion, he said. Huntingdon, chartered in 1945 and with 2,500 members, previously had an Owens Fiberglas plant as its sponsor.
Prior to the merger, located in State College, SPE had obtained a community charter that encompasses all of Huntingdon County. Brooks credited Merger Solutions Group, an Oregon consulting firm, in helping clear the regulatory impasse. “They were a big help,” he said.
Asked for comment, an NCUA spokesman noted that “to conduct a merger, Huntingdon had to expand its field of membership which wasn’t ultimately approved by NCUA’s Office of Consumer Protection until February 2011.”
In another completion this week of a Pennsylvania merger in Pittsburgh, the $727 million Clearview FCU of Moon Township said it has completed this week of the$49 million A-K Valley FCU, Lower Burrell. That merger was first announced in June 2010.
In a statement commenting on the merger trend, Mark Brennan, president/CEO of Clearview, said conditions remain ripe for further consolidations since it may be “difficult” for some CUs to offer products and services independently. “We are always looking for credit union partners where we can share costs and efficiencies in the spirit of the cooperative movement,” Brennan concluded.