A merger of two New Jersey credit unions, located three blocks apart and both serving Rutgers University, remained on hold last week following a bitter member-board dispute involving the smaller of the two, the $3 million Rutgers University Student & Alumni FCU of New Brunswick.
The $71 million Rutgers Federal Credit Union, which serves employees and staff of the New Jersey university as well as two hospitals, said it remains open to a merger with RUSA FCU, which is awaiting s resolution of a whistleblower's lawsuit filed in a Middlesex County court seeking to block the merger on grounds the consolidation would injure RUSA members.
The complaint filed Oct. 7 also alleges that two RUSA board members are unqualified to serve and two others stand to gain financial advantage from the transaction, according to media reports, which also noted that a settlement of the case may be near.
The president/CEO of Rutgers FCU, Howard Elkin, maintained that a merger of the two CUs would create "economies of scale and product and service advantages" for RUSA. He declined to discuss the circumstances or merits of the RUSA board suit but "misinformation has been spread" about the proposed merger.
The RUSA board had signed an Oct. 5 letter of intent for the merger, subsequently delayed by the court suit.
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