The lesson this week from two credit union mergers rejected bymembers is that the message needs to get out early and it needs toconvey the benefits that would come with consolidation.

In addition, culture differences among employee groups must becarefully considered to avoid missteps, according to a keyparticipant and an industry consultant.

The members of the smaller credit unions in recent days haveturned down proposed mergers of the $63 million Montana First CU ofMissoula with the $432 million Horizon CU of Spokane, Wash., and$96 million Main Street Financial CU of Baton Rouge, La., with the$260 million Jefferson Financial CU of Metairie in suburban NewOrleans.

In Montana, Christie Sisco, president/CEO at Montana First,acknowledged there were problems making the many governmentemployees in the CU membership fully aware of the advantages of anout-of-state merger.

Some civil servants accustomed to regular informational meetingsin the government bureaucracy may not have been used to certainpractices in the private sector, she said.

“We felt that an information letter with a FAQ and an invitationto call with a second letter, 60 days later, announcing a specialmeeting was sufficient opportunity for dialogue,” said Sisco.

But based on the outcry from a group of objecting members whoconducted a letter writing campaign in the Missouliannewspaper, that may not have been enough.

“I did learn from the process that one must take intoconsideration what resonates with the membership,” Sisco said,adding that with U.S. Forest Service employees and retirees as partof its core membership it become known that “in their daily worklives, they have public meetings on an ongoing basis and goingforward we will keep their needs at the forefront.”

Sisco also lamented turnout at the Jan. 5 meeting – 18% of 7,200eligible members.

It is “unfortunate,” she said, that a minority of the membershipaffected the outcome. She added that many employees at the Jan. 5meeting who had voted down the plan said they would havereconsidered had they fully understood the benefits of the mergerwith the Spokane credit union.

Tom Glatt Jr., an industry consultant in Wilmington, N.C., saidmany CU managers lack a clear vision in understanding membermotivation and perspectives.

It is not “always shared” and while Montana First has done wellwith solid loan and deposit growth making it an attractive partner,their members “are probably content, and content people generallysee no need for a change in the status quo,” Glatt said.

For the acquiring CU, that requires extra work to ensure mergerbenefits are fully understood, Glatt said, and a mere “description”of a merger plan “is quite inadequate.”

The Louisiana situation was different, he said.

“What is interesting about Main Street is that to readtheir newsletters over the last two years you would never know”that credit union had been struggling financially, hesaid.

Being candid about “tough times” can be productive “in preparingmembers for the possibility of tough choices such as a merger,” theconsultant said.

Main Street Financial lost $2 million in 2010 after being hithard by corporate losses but was on the rebound, said its formerCEO, Cary Anderson, who retired on Dec. 1.