BALTIMORE (3/27/12)--Several credit unions' mergers in Maryland have sparked local bankers to say that the mergers are creating a competitive advantage for credit unions.
SECU of Maryland, the state's second-largest credit union with $2.2 billion assets, recently announced it was merging with $82.4 million Anne Arundel County Employees FCU (Baltimore Business Journal March 25).
Rod Staatz, CEO of SECU, said he is open to more mergers if they would be a good cultural fit for his credit union.
In 2011, there were five mergers among Maryland credit unions. In 2010, there was one.
Baltimore's MECU, the state's third largest credit union with $1.1 billion in assets, merged with Lever United Community CU in 2006, one year after it merged with White Eagle CU.
Dorothy Stierhoff, a spokesperson for the MECU, told the Baltimore Business Journal the credit union would consider more mergers if the right opportunity presented itself.
If credit unions want to expand beyond their original charters, they should not be allowed to maintain their tax status and should convert to banks, said Kathleen Murphy, CEO of the Maryland Bankers Association in the article.
Compliance demands and a weak lending market are forcing smaller credit unions to seek merger partners, said Kip Weissman, a Washington, D.C. lawyer who represents credit unions.
Some smaller credit unions also are unable to offer their members the menu of products and services that larger financial institutions offer, said Johan Worth, chief economist with the National Credit Union Administration (NCUA). That was among the reasons Arundel CEO Rick Stoll cited for his credit union's merger with SECU.
Credit unions also have been hit with assessments to shore up the NCUA's credit union insurance fund. Credit unions faced $3.3 billion in assessments in the last three years, Worth said.
Assessments were among the reasons why United Maryland Employees FCU, Owings Mills, Md., merged with Destinations CU, Parkville, Md., said Roxanne Miller United Maryland's former CEO. United Maryland also lost one of its primary sponsor groups with the closing of the Solo Cup manufacturing plant.
To read the full article, use the link.