Anything big, including big credit unions, can be intimidating to some small credit unions and their members.

However, some billion dollar credit unions that have merged small credit unions with assets of less than $50 million into their fold have learned a few things about making the consolidation less daunting.

One of the primary concerns is that longtime members fear after the merger is completed, they will lose that special personalized service their small credit union provided for so many years.

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"Just because we are bigger, asset wise, we never assume that we are better," Ric Mathias, vice president of retail development at the $2 billion Summit Credit Union in Madison, Wis., explained. "We go into a merger with an open mind to find out what I call the best of scenarios. We want to know from the credit union what is working. What do they feel is the compelling advantage of their credit union today? We always consider their process improvements or take up their best practices and merge them into our process."

More than a year ago, the $15.4 million Veterans Administration Credit Union in Milwaukee that served about 2,700 members, consolidated with Summit. One of the best practices from Veterans Administration CU adopted by Summit was a new hire orientation program, according to Mathias. Soon after new employees were hired by the VA, the credit union would invite them to an orientation meeting to learn about its financial products and services.

"We plan to incorporate that orientation program for certain segments of our membership," Mathias said.

Because many VACU members maintained a basic saving and checking account relationship with their cooperative, Mathias said Summit had a "good amount of success" in offering them auto and home equity loans, as well as credit cards, enhanced online banking services and mobile banking. He declined to provide specific numbers.

"When we approached this opportunity we did not look at the individual member profitability," he said. "We actually looked at what were the products and services we had that the VACU did not to determine if we would be a good strategic partner for them."

Mathias said Summit retained most VACU members in part by keeping the credit union's sole office open and being sensitive to other facets that were meaningful. For example, Summit retained an American flag graphic that was part of VACU's logo for marketing materials, brochures and other communications.

"The VACU had the American flag as part of their logo. That is something they felt very strongly about because of the veterans," Mathias explained. "We try to incorporate things that have a lot of history and a lot of emotional relevance. We feel that if something is important to a credit union's history, then who are we to say no to that? That, in and of itself, offsets concern that a big corporate entity is coming in and everything is going to change."

Read more: Slow and steady wins the merger race …

Though the $48 million New Mexico Energy Credit Union in Albuquerque merged with the $1.2 billion New Mexico Educators Federal Credit Union at the end of April 2013, the systems and operations conversion wasn't completed until the end of August of this year, according to Anneliese Elrod, SVP of strategic marketing and development at New Mexico Educators FCU. And that was deliberate.

While many credit unions attempt to complete systems and operations conversion within 30 or 60 days, the Albuquerque-based New Mexico Educators FCU took four months, Elrod said.

"We took that four months to plan, to communicate and to make sure that the transition was impact free as possible, and to make sure that everyone understood upfront what would be changing and what would not be changing," she explained.

The credit union also wanted to make sure it was being respectful of the transitions it was asking New Mexico Energy CU members to go through, she added. For example, New Mexico Educators FCU minimized changing member numbers as well as account numbers for checking accounts, credit and debit cards for New Mexico Energy members.

"If we didn't have to change the member number and their checking account and debit and credit and debit card account number, we didn't," Elrod said. "Changing all of the member numbers might have made the conversion easier for us, but we wanted to keep a member-centric focus. Ultimately, they pay the bills. If we keep them satisfied and keep their best interest in mind, we can't lose."

In addition to holding town hall meetings before the merger, New Mexico Educators FCU held town hall meetings after the merger and during the operations and systems conversion to gather feedback from New Mexico Energy members about what they liked or what they didn't like about the consolidation process.

These efforts and others enabled New Mexico Educators FCU to retain more than 95% of the 2,800 members of New Mexico Energy CU, Elrod said. Post-merger, New Mexico Educators also had a 10% growth in total loans that originated from New Mexico Energy CU members.

"We didn't analyze the New Mexico Energy members by their individual profitability," she said. "Instead, we implemented a relationship expansion program by offering [them] preapproved loans, inviting them to come into a branch for a relationship consultation to identify where we could save them money and make them aware of other products and services they may find relevant to their needs."

What received a lot of positive response from New Mexico Energy members was New Mexico Educators FCU's "earn your return" and "community rewards" programs, according to Elrod.

When members consolidated all of their financial relationships with the credit union, they received a bonus dividend on their average yearly loan and deposit balances. The community rewards program allows members to earn cash rewards for every signature-based transaction made with their debit card. Additionally, the credit union contributes a cash reward to the community and category of members' choice.

"This was the first merger New Mexico Educators Federal Credit Union did in 15 years," Elrod said. "It was a great learning experience and I think overall it was a great success because we started this merger from the members' perspective and [made] sure they felt supported and valued."

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Peter Strozniak

Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.