Moving to protect market share, two mid-sized Washington Statecredit unions, Yakima Valley CU and Catholic CU, both in Yakima andlocated six blocks apart, are planning a June merger creating a$460 million CU.

Informal discussions between the competing CUs have been ongoingfor nearly a decade but a decision to push a consolidation wastriggered most recently by market forays by both banks and CUs intograbbing new loan business in Yakima, a community of 70,000 nearthe Oregon line.

"Not since Empower in New York, I don't remember hearing about amerger of our kind involving two healthy and well capitalizedcredit unions joining in the same market," said Mina Worthington,president/CEO of Yakima Valley, who will become head of thecombined CU which will be rebranded with a new name.

Worthington said the 2007 combination of Empower CU withnow-merged and upstate Power served as a model for the Yakima CUsin following a successful merger path.

"One of our board members saw one of those slide presentationsat a meeting describing how they did it and we thought we ought tofollow their lead," said Worthington, who also cited the commonculture and structure characteristics of the two Yakima CUs inpursuing a partnership.

The decision to link up now, she said, was spurred by marketpenetration in Yakima by both Wenatchee-based Cashmere Bank andHapo Community CU of nearby Richland opening branches and garneringindirect loans, said Worthington.

Under the merger plan, the current president/CEO of Catholic,Paul Regimbal, is slated to retire in June 2012.

A statement on the merger said both CUs have signed anon-binding letter of intent with the next step being formalapplication to regulatory agencies and member approval. Arebranding firm will be hired by the end of the month to come upwith a new name, Worthington said, adding that D. Hilton Associatesof Dallas has been the consultant on the merger.

The combined CU will employ 150 people and have eight branchesserving 50,000 members in southern Washington.

Yakima Valley was started as a firefighters' CU and latermorphed into a city/county CU with a community charter.