How do you steer a brand out front, convince allinvolved of the potential savings and still deliver a suite ofproducts and services to credit unions, hopefully, seamlessly?Consider a merger.

That's what happened between CUcorp and CU Solutions Group whenthe two combined operations on July 1. The Lansing, Mich.-basedCUcorp is a wholly-owned subsidiary of the Michigan Credit Union League & Affiliates. The CUSO servesthe state's credit unions with card services, lending products andconsulting and partner relationships. Located in Livonia, Mich.,CU Solutions Group was formed in 2010 by combining severalentities including CU Village, HRN, and Koker Goodwin into onecompany, according to the league.

As a result of that consolidation, CUSG extended its reachoutside of Michigan to offer credit unions nationwide service inmarketing, technology, membership enhancement and performancemanagement. The recent merger will take the CUSO a step furtherwith credit union performance solutions.

Dave Adams, president/CEO of the Michigan Credit Union League& Affiliates, who will continue to serve as CEO of CUSG, saidprior to the merger, somewhere in the myriad of divisions in place,a few things had become muddled.

“We came to the realization that operating with separate unitshas advantages but the big disadvantage was a failure to realizeefficiencies and brand clarity,” Adams explained.

With the merger, more room has opened up for CUSG to reap taxsavings and other efficiencies while still providing strong returnto the CUSO's shareholders and continued value to its stakeholders,Adams said.

For starters, combining CUcorp and CUSG cost less than $100,000,Adams noted, adding the merger included the typical legal andanalysis expenses. However, the consolidation is expected to yieldmore than $1.5 million in tax savings.

In addition to being owned by the MCUL, CUSG's other ownersinclude 125 investors made up of 20 leagues, more than 100 creditunions and CUSOs, CUNA Mutual Group, CUNA Strategic Services andCO-OP Financial Services.

Even with the merger, CUSG's services still run the gamut fromdozens of offerings within its technology and marketing spacesamong others to its signature Invest in America, 2012 Herb Wegner Memorial Award forOutstanding Program recipient. Launched in the 2008, the programprovides members nationwide with savings on product and servicesoffered by companies such as General Motors, Sprint, Dell, TurboTaxand DirectTV.

“I believe the merger will also reduce the brand confusion thatis sometimes in the marketplace. With just one company andone name, more focus can be placed on marketing the actual productsrather than trying to educate credit unions on what each companydoes,” said Jackie Buchanan, who has served on CUSG's board since2004 and is president/CEO of the $1.5 billion Genisys Credit Unionin Auburn Hills, Mich.

Like Adams, she sees how reduced expenses and increasedefficiencies will impact all of CUSG's stakeholders. By having onlyone management team, one back office operation and one board ofdirectors, Buchanan said more resources will be available forcontinued research, development and possibly more strategicacquisitions in the future.

“With these increased sales and usage as well as with thereduced expenses, pricing will continue to be very competitive forall credit unions,” said Buchanan, CUSG's treasurer. “Credit unionshave already benefited greatly because of the very talented teamsof both of these organizations.”

Adams acknowledged the biggest consolidation challenge was themanagement structure. Drew Egan, who previously served as presidentand chief operating officer of CUcorp, will continue on asexecutive vice president and chief operating officer of CUSG. ToddMason, the CUSO's chief operating officer, left the organization inJune for another career opportunity, according to Adams. All 40 ofCUcorp's other employees transitioned over to CUSG.

There were significant moves in board composition as a result ofthe merger, Adams noted. CUcorp operated like a traditionalleague-owned service corporation with seven directors elected bythe MCUL board, he explained. The league had a 70% ownership stakein CUSG with 80 credit unions and 19 other leagues having smallownership interests. Adams served as chairman of the board alongwith two other Michigan league staffers in addition torepresentatives from CUSG's other shareholders. After the merger,the board now has 12 members with Adams and league staff no longerserving on the board. Ultimately, the changes worked out.

“It's gone very well. We have a very stable team of managementwho are used to working with each other,” Adams said. “Our policymakers have made it clear that they want a clean separation betweenthe business units and the association.”

Pete Dzuris, who has served on both CUcorp's board for roughlyfive years and CUSG's board for 10 years, saw the value in stickingwith the newly-combined entity

“We've seen a lot of good things come from the company,” saidCUSG Vice Chairman Dzuris, who is also president/CEO of the $272million Northland Area Federal Credit Union in Oscoda, Mich. “Justas you see credit unions and consolidation of not just smaller onesinto larger ones but also large credit unions into larger ones,what (this merger) does it takes the resources of each to benefitall parties.”

Dzuris, who is also a CUNA board member, said ownershipopportunities have opened up for credit unions to invest in CUSG.Eighty of the CUSO's current owners have gone that route, Adamssaid. Earnings have also helped to reduce the cost of dues andproduced an 8% yield for CUSG's long-time stakeholders.

“That's somewhat unique in the credit union space. Our clientcredit unions can't say 'you're profitable at our expense,'” Adamssaid.

Indeed, the dividend yield in 2011 and 2012 was 4% for investorswho came aboard over the last 24 months. Adams is expecting thesame for 2013. He said original investors received a higher 8%dividend yield because their initial investment was done at a muchlower level.

Looking ahead, Adams is counting on CUSG's diversified model totake the subsidiary further. “We couldn't do what we do without ourstate and national association partners,” Adams said.”