The $6.1 million Newspaper Employees Credit Union in Kearns, Utah, said it plans to merge into the $143 million American United Family of Credit Unions Federal Credit Union in Salt Lake City.
The Newspaper Employees CU has scheduled a special members’ meeting on Aug. 9 to vote for or against the merger.
“We have become acquainted with the managers and board members of this forward-looking and technologically savvy credit union (American United Family of Credit Unions FCU) and we like what we see,” the Newspaper Employees CU said in a statement on its website.
Although Newspaper Employees CU has a net worth/total assets ratio of 16.59, its loan, fee and investment revenues have been declining over the past five years, according to NCUA financial performance reports.
From 2008 to 2012, the credit union posted a total net loss of more than $580,000. Additionally, the credit union’s membership has fallen from 1,653 in March 2008 to 911 in March 2013, according to Callahan & Associates.
“It is true that our venerable credit union, formed in the 1930s by newspaper employees, will change from being a stand-alone, independent credit union to a branch of a larger credit union,” Newspaper Employees CU stated.
“However, in these changing times with a vastly more rigid regulatory environment and a greatly-increased consumer demand for variety in financial services, mergers are considered the smart and safe way to go. We are a $6 million credit union—tiny by present-day standards—and we cannot enjoy the economies of scale that are available to credit unions such as American United,” the credit union said.
Chartered in 1931, the credit union was formed to service the financial needs of employees at the Salt Lake Tribune and the Deseret News.
Post merger, the credit union said its sole location would remain open and its three employees would continue working for American United Family of Credit Unions FCU.