CU implications of HP/Compaq merger?

PALO ALTO, Calif. – The announced merger of Hewlett-Packard and Compaq Computer could have a big impact on the PC market, but there may also be an impact to the credit union industry. HP’s credit union, the $1.3 billion HP Employees FCU, Palo Alto, Calif., will be monitoring the deal to see if there are any potential CUs it might merge with as a result of the deal “Frankly it was a surprise. I had no inkling of it,” said Steve Lumm, president/CEO of HP Employees FCU. Lumm said he is having someone at his CU checking out which CUs serve Compaq. Compaq doesn’t have its own CU, but is served by Houston FCU and possibly others. Lumm said a merger might make sense if the HP-Compaq deal goes through. “Our strategy all along has been to focus on HP and Agilent (an HP spin-off). That’s what our sponsors want, so I would expect to take a look at any credit union mergers,” said Lumm. HP Employees FCU itself is the result of four formerly separate HP CUs merging. The last HP CU merger closed in September of 1999. Lumm said HP Employees FCU is among a dying breed that still caters to a few main sponsors. “We’re very driven by the desires of HP. I realize we’re a dying breed. We really have programs that are tailored to support our sponsors’ benefit programs.” The way today’s HPEFCU looks was largely determined by HP. “When HP announced that it was spinning off Agilent, HP and Agilent both indicated they wanted one credit union, not three. So that basically drove our merger,” said Lumm. Of HPEFCU’s 11-person board, two-thirds of seats are held by HP and one-quarter held by Agilent. “We have senior execs from both companies on our board.” -