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LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

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CU System
Filene Report Examines Merger Of Healthy Equals
MADISON, Wis. (9/30/13)--The Filene Research Institute has studied credit union mergers from several angles during the past two decades. Now it has examined a new trend--mergers of healthy equal credit unions.

A weak signal has emerged in the credit union merger landscape: "merger of equals" (MoE), according to "Credit Union Merger of Equals: A Preliminary Examination," Filene said.

MoEs occur when two healthy credit unions of similar size combine their assets and capabilities. While relatively few data exist to describe or explain this phenomenon, MoEs, while not common, represent a potentially important trend, said Filene. Although it is difficult to say what drives this emerging trend, qualitative discussions with credit unions across North America centers on a triad of:
  1. The need for scale;
  2. Regulatory pressures; and
  3. Consumer demand for more (expensive) services.
Consequently, more credit union leaders find themselves addressing the question: How prepared are we for a merger of equals?

In 2012, Filene and SchellingPoint developed an approach that allowed credit union leadership teams to answer the question. In a pilot, Filene asked 10 U.S. and Canadian credit unions, ranging in asset size from $150 million to $2.5 billion, to undergo an assessment of their organization's readiness for an MoE.
 
CEOs, senior leaders, and board members responded to, an online opinion survey and an online convergence form. The activities educated participants about the scope of an MoE and they shared their opinions on the multiple dimensions of MoEs.
 
While Filene's research indicates an MoE is a valid business tool in certain circumstances, it is not advocating for--or against--one. Instead it aims to reveal facts about a trend that may impact many credit unions in the coming years, the report said.
 
The report details Filene's interpretations of those participants' inputs, provides a structure for discussing these results, and pinpoints where discussion is required so credit unions can efficiently converge on next steps around MoE Topic.
 
To access the report, use the link.
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