When credit union members of the Texas Credit Union League were presented with the question whether to merge with Arkansas Credit Union League and the Credit Union Association of Oklahoma to form a new regional cooperative organization – the Cornerstone Credit Union League – there was a sense of quiet inevitability in the air.
“There was no debate, no questions or anything,” said John Lederer, president/CEO of the $1 billion Credit Union of Texas in Dallas, who voted for the proposal Wednesday during a TCUL special meeting in Austin. “I think it was a no-brainer, slam-dunk kind of thing.”
However, in January and February, the TCUL held town hall meetings throughout Texas to inform the state credit unions about the formation of Cornerstone Credit Union League, so perhaps all of the questions had already been asked and answered, said Lederer.
Only 114 of the state’s 535 credit unions that attended the special meeting voted. The final vote count was 109 in favor, five, against.
“I have no idea who voted against it,” Lederer said. “I talked to a few people and if anybody did, they were not willing to admit it.”
Lederer believes the consolidation of the leagues is inevitable because of the many mergers that are occurring among credit unions across the country. With less dues-paying credit union members, it becomes increasingly difficult for smaller leagues such as Arkansas and Oklahoma to keep up with rising costs and to deliver the products and services credit unions need.
“When I first came to work at Mil-Way Federal Credit Union in 1985, there were 120 credit unions in Arkansas. Now, we are in the upper 50s,” said Allen Brown, CEO/president of the $106 million Mil-Way FCU in Texarkana, Ark. “Our dues structure is such to where it’s hard to make ends meet and it’s harder to keep raising dues.”
Arkansas and Oklahoma league members will vote on the merger on April 11 and May 13, respectively.
Brown anticipates Arkansas credit unions will vote in favor of the merger next week.
“One of the things we (Arkansas Credit Union League) did in 1995 is that we sold our league services corporation to the Texas Credit Union League,” said Brown, who was then a board member of the ACUL. “All of our credit unions in Arkansas have access to the resources center in Texas for audit services compliance, HR consulting and other services.
“That has been a very great relationship between their service corporations and our credit unions in Arkansas. This, (Cornerstone Credit Union League) in my opinion, is basically the same thing,” he said.
Tim Lyons of the $1.2 billion TTCU in Tulsa, Okla., said that the merger of the leagues made more sense as time went by. The state leagues initially began discussing the possibility of a merger in 2009.
“When I started in the credit union movement in Oklahoma 25 years ago, there were still about 110 credit unions in Oklahoma, and now there are about 70 credit unions in the state, and I know there will be fewer (in the future),” Lyons said. “There are not enough credit unions for us to maintain a viable credit union league. A small league is not able to handle the diverse needs of all the different credit unions in Oklahoma.”
Lyons also believes Oklahoma’s credit unions will vote in favor of the consolidation on May 13.
The merger proposal formally began last year when credit unions in each state were notified at their annual league meetings that the three leagues were discussing consolidation. On Dec. 17, the boards of the three leagues announced their intention to pursue consolidation into a single regional organization.
Although Cornerstone’s operations would be based in Dallas, an office will remain in each state capital to advocate and protect the interests of credit unions in their respective state legislatures.
If Arkansas and Oklahoma credit unions vote yes, credit union executives will assume positions on the Cornerstone Credit Union League board of directors with three directors from Arkansas, three directors from Oklahoma, and 12 directors from Texas.
Although Texas permits board members to be paid, the board of the new league will be unpaid volunteers, its organizers said.
Cornerstone’s first Texas directors will include: James S. Tuggle of the $39 million Transtar FCU in Houston; Kenny Harrington of the $188 million MemberSource CU in Houston; Paul Withey of the $289 million Texas Bay Area CU in Houston; Carol Murray of the $6 million Express-News FCU in San Antonio; JoBetsy Tyler of the $58 million First Central CU in Waco; Paul A. Trylko of the $612 million Amplify FCU in Austin; Nancy M. Croix Stroud of the $42 million First Class American CU in Fort Worth; Robert Peterson of the $87 million One Source FCU in El Paso; James L. Boyd of the $348 million Abilene Teachers FCU in Abilene; Z. Suzanne Chism, of the $14 million Texas Health Resources CU in Dallas; Kay Stewart of the $124 million North East Texas CU in Lone Star and Jim Brisendine of the $371 million Resource One CU in Dallas.
From Oklahoma, the Cornerstone board members will be: Jason Boesch of the $25 million Oklahoma RE&T Employees CU in Oklahoma City; Genia Wilson of the $474 million Oklahoma Central CU in Tulsa and Michael Kloiber of the $2.9 billion Tinker FCU in Oklahoma City.
From Arkansas, the Cornerstone board members will be Windy Campbell of the $10 million Electric Cooperatives FCU in Little Rock; Dwayne Ashcraft of the $64 million Arkansas Superior FCU, in Warren, and Allen Brown of the $106 million Mil-Way FCU in Texarkana.
A wave of league consolidations began in 2007 when the North and South Dakota Credit Union Leagues formed the Credit Union Association of the Dakotas. Later, the Maryland and Washington, D.C., leagues combined as did the Arizona, Colorado and Wyoming credit union leagues under the Mountain West Credit Union Association, the Alabama and Florida credit union leagues merged under the League of Southeastern Credit Unions, and the Oregon and Washington credit union leagues consolidated under the Northwest Credit Union Association.
What’s more, in December 2012, the North Carolina Credit Union League and the South Carolina Credit Union League boards of directors authorized a six-member task force to explore the consolidation of the two leagues.
Not all merger proposals went through. The Maryland and DC Credit Union Association and New Jersey Credit Union League backed off their plans to consolidate in June 2011.