Belco Community Credit Union, which figured in a landmark Pennsylvania Supreme Court decision two years ago upholding community charter/field of membership powers in the face of a banking challenge, said Monday its planned merger this month of a small, ailing credit union fits its long-term consolidation strategy.

“Ever since the ruling, we've worked hard at expanding our branch network but in this kind of environment you have to be extremely cautious,” said Lonny Maurer, president/CEO.

The $366 million Belco Community of Harrisburg announced this week it is proceeding with the June 30 merger of the $6 million LEBCO Educators FCU of Lebanon, whose board last year solicited merger bids from several large Pennsylvania CUs. Both state and federal regulators have approved.

LEBCO Educators, which lost $144,000 last year and has a 5.63% net worth, said compliance burdens prevented it from being able to provide affordable high-tech services to its 1,300 members.

“There were too many negative factors impacting LEBCO,” Maurer said. He said no future mergers are immediately planned but that the 50,000-member CU remains open to opportunities.

In the meantime, with the FOM case behind it, Belco expects to eventually resume adding more branches, Maurer said, with two new facilities now operating in Lancaster and Hanover.

“Spreads are too narrow now,” Maurer said, to contemplate quick branch expansion but down the road conditions may change.

On another topic, Maurer said that Belco, with heavy debit card penetration in its seven-county market, expects to lose $700,000 a year if the interchange provisions are not delayed in Congress. 

“I can guarantee we will find a way to make up that kind of loss but right now it's the retailers who are about to gain a windfall,” Maurer said.