The planned interstate foray next month by Utah’s Mountain America Federal Credit Union into neighboring Idaho is raising some eyebrows among a group of CUs in the southeast portion of the state.
“We’ve heard about their plans for several years but why would they want to come into an area already overbanked with many credit unions and community banks?” asked Robert Taylor, president/CEO of the $158 million Idaho State University CU of Pocatello.
Taylor stressed he has nothing against competition but the growth market for a new entry like the $3 billion Mountain America could prove slim given “we have a well-entrenched and loyal member base,” particularly among the college crowd, said Taylor.
Mountain America, headquartered in the Salt Lake City suburb of West Jordan, has said it finds the Idaho market attractive “and close to our member base across the border.”
It plans to open two branches in mid-December, one in Chubbuck, and a Pocatello suburb, the other in Idaho Falls.
Taylor said “Idaho is a strong credit union state” with high penetration and so it may be a natural for Mountain America to cross the state line but the prospects for adding sizable numbers of accounts could be limited.
Mountain America has most of its 65 branches in Utah, but also has a footprint in New Mexico, Arizona and Nevada. It said it has about 2,000 members in Idaho already.
“We want to see how things go before we consider more branches but it will be our first entry” into Idaho without pursing the merger route, said Sterling Nielsen, president/CEO of Mountain America.
Kent Oram, president/CEO of the $989 million Idaho Central CU, the state’s largest, said he could understand “the overbanked criticism” but that he heartily welcomes the competition.
He said his Pocatello credit union has enjoyed 15% member growth and the state’s economic prospects remain bright, helped by an influx of retirees “as we become a destination for those seeking the good, slow life.”
Idaho Central has its own expansion plans, including adding two more facilities in Burley in January and in Caldwell by August to its existing 18-facility network.
Another CEO, Shane Berger of the $158 million Beehive CU of Rexburg said he too “is a free market advocate” and that his own CU has already found a strong following among members of the Mormon Church.
“They might want to think twice” before coming to Idaho since members retain loyalty to home-grown institutions, he said.