The failure last week of Alabama's $25 billion Colonial Bank, a multistate operation with nearly 350 branches, triggered a new round of deposits and loan inquires at several credit unions."Look, people want stability, safety and soundness in handling their finances and if credit unions can't demonstrate that now, we'll never do it," said Joseph Newberry, president/CEO of the $2.5 billion Redstone FCU of Huntsville, Ala.Redstone, like others across the state and in Florida and Texas where Colonial had branches, was being careful about launching ad campaigns that might undermine or demean a financial competitor.Still, CU officials acknowledged that they had experienced many phone calls and branch visits from worried Colonial depositors and borrowers. Colonial, based in Montgomery, was the largest bank to fail so far this year."Some of our branches are seeing a groundswell of deposits," said Steve Swofford, president/CEO of the $535 million Alabama CU of Tuscaloosa.Swofford said that apart from the Colonial collapse, many bank mergers across the state continue to foster public uncertainty about financial institutions, which is giving CUs an edge "where it comes to offering personal service and a safe place to put their funds.""When they see their bank like Wachovia or AmSouth suddenly merged, that creates a certain fear about the unknown, who they will be dealing with in the future at their local branch," said Swofford.Newberry agreed that bank mergers were having a definite positive effect on CU growth, noting that his CU has filled an important vacuum in "coming to the aid of charities and nonprofits" that have seen banks abandon their sponsorships. For instance, Redstone, he said, has a new tie-in with the YMCA on loan business and in a member sign-up deal offering special debit card incentives.Greg McClellan, president/CEO of the $771 million Max CU of Montgomery, said his CU has done well all year "by keeping our name out there with service and civic clubs" as a means of showing stability.Although Max CU months ago ran its "bank merry-go-round" ad, which poked fun at bank mergers, the Montgomery CU has avoided ads that claim "we're financially stronger than the next guy," McClellan said. Declining to discuss market promotions for the fall, McClellan said that when too many financial institutions start touting financial stability, it becomes overkill. Consumers fail to notice "when everyone is doing it," he added.Like other CEOs in Alabama, McClellan said the problems of Colonial and its flawed mortgage operation, particularly in Florida, have been well known for months, with the bank's plight covered widely in Southern newspapers. "So it was not a surprise to us when the bank collapsed," said McClellan. The impact will be significant in Montgomery, he said, because Colonial's headquarters, with 250 employees, is likely to move elsewhere. Colonial Bank was purchased in an FDIC-backed deal by BB&T of Winston-Salem, N.C.The Alabama CEOs contacted said that the July 31 conservatorship of the $194 million Mutual Savings CU of Birmingham had caused only a handful of inquiries from members or the public about CU stability. "That was just a blip when you look at Colonial," said one.–[email protected]