No FOM Overlap Worries Stemming from Maryland Merger, Expansion
A pending credit union merger in a Washington, D.C. suburb could have triggered a clash for teacher and government worker accounts this month.
The $83 million Montgomery County Employees FCU, which last year won NCUA approval to expand its membership to include 11,000 Maryland teachers, has now pitted it against the $392 million Educational Systems FCU of Greenbelt, Md., which is planning to merge in the ailing $384 million Montgomery County Teachers FCU of Rockville. The Educational Systems-MCT FCU merger if approved would create Maryland’s seventh largest credit union with wide penetration in the Washington suburbs.
“Our NCUA application was filed long before their merger was announced but it is our hope that we can attract some of those members in Montgomery County Teachers who would find us a better place to go,” explained John Pierson, chief development officer of Montgomery County Employees FCU of Germantown.
Earlier this week Montgomery County Employees issued a press release touting its expanded FOM stressing now that all 22,000 government workers, including employees of the Montgomery County Public School System, are now eligible for membership after the NCUA removed an exclusionary clause.
“NCUA determined that this exclusion was no longer required and removed the exclusion on MCPS employees’ eligibility to join MCE FCU,” the statement read. It added that “MCPS employees can now choose to receive the same high level of sound financial services that other employees of Montgomery County, Maryland have experienced for more than four decades.”
Educational Systems in its bid to merge Montgomery County Teachers said it has no quarrel with a competitor pursuing the overlapping member base.
“I’m good friends with Jim Norris and I have no sour grapes about their pursuit of teachers now that the exclusion is eliminated,” said Chris Conway, president/CEO of Educational Systems, referencing MCE FCU CEO Norris. The market is big enough for all comers, and “it is certainly better that these teachers go with a credit union than head to a bank,” he said.
Meanwhile Conway said Educational System’s planned merger later this year of Montgomery County Teachers is progressing well as they perform due diligence following the signing of a letter of intent early last month. MCT FCU has long been under a regulatory watch after it suffered large losses in secondary mortgages racking up a $6 million loss for 2010 and $739,000 last year. Its net worth had fallen to 4.4%.