The ordinary human being does not live long enough to draw any substantial benefit from his own experience. And no one can benefit by the experience of others. . . each (generation) must learn its lessons anew. (Albert Einstein) October 26, 1929)
On October 20, 2025 Callahan published an analysis with multiple charts showing how mergers are changing the institutional character of the credit union system. The graphs have ten and twenty year time lines documenting the number, size and source by peer group of this consolidation.
The analysis, Credit Union Mergers on the Rise, provides essential macro trends to track how this consolidation is affecting the institutional structure of the credit union system. One example is that over the past ten years the average credit union asset size has increased from $188 million to $538 million.
There are many other data points one might take from the article to help frame critical questions that should be considered, but are often overlooked. For many view this consolidation as inevitable or even necessary.
Several Important Questions that Need Answers
The basic financial math of credit union mergers is simple: 1 + 1 = 1. There are no added members, shares, loans, employees or outlets. Instead in most cases a financially strong long-standing coop has turned over all of its members’ assets, equity and future direction to another organization. One whose leadership they had no role in evaluating or choosing. Sometimes the new management’s head office is hundreds or even thousands of miles distant with no connection to the merging credit union’s members and community.
Credit unions are built on relationships/bonds and generations of member-owner loyalty. That commitment was their initial, “sweat equity” capital and the foundation for much of their public reputational goodwill today.
So it is important to consider whether these trends and sometimes questionable activity are helping or hurting the system’s future. Are mergers a symptom of a system’s weakness, an inability to sustain organic growth, or a strength?
The Need for an Industry Conversation
Other questions that could help member-owners and cu leaders better understand and evaluate what is occurring could include:
Is consolidation resulting in fewer charters inevitable?
How has the coop system’s approach to merger changed over the past decades?
What role and benefits are third parties gaining in promoting these combinations?
What are options for credit unions who feel the need to merge?
What should member-owners know when asked to approve the transfer of their entire coop’s assets and legacy about the performance, business priorities, and leadership of the continuing credit union?
What is the fiduciary duty to the member-owners when leadership decides to seek a merger? How should the conflicts of interest be addressed when CEO’s negotiate their own merger benefits?
What is the regulator’s role when reviewing merger applications? What is their obligation to the member-owners? Are they responsible for the information owners receive when approving the Member Special Meeting Notice announcing members’ required voting approval?
Has there been any multi-year studies of well capitalized credit union mergers and the before and after performance trends over a five year period? How did member value change? What happened to the community relationships and employees? What are the additional immediate costs incurred by mergers?
Who Will Lead These Dialogues?
How one introduces an issue will often determine what outcomes will be proposed. With mergers occurring at an average of three to four per week, there has been no industry discussion of the implications and the benefit or harm to the members-owners.
Now, not later is the tme to understand the consequences of these i mergers, espcially with the dramatic increase in scale. Billions of member wealth is now being transferred for free with minimal information provided the owners who must approve.
Individual examples of multi-billion dollar cross- country combinations or of a credit union completing four merger approvals in one month (and ten in one year) are routinely announced. But these separate, individual events, will have significant consequences for every other credit union.
For no credit union stands alone. All are part of an interdependent system which creates individual opportunities and vulnerabilities.
Merger activities are having lasting consequences for the member-owners, their communities, and the shape of financial options in America.
The future of the coop system will be different. These concens are not an effort to go back to what was. Rather it is a necessary examination, as Einstein suggests, to gain our wisdom now and not wait for future generations to assess what went right or wrong.
We would be happy to collaborate with you on this Chip! Our chief economist Luis G Dopico has done decades of research on this and we are focused on making sure that when mergers do happen they are done in a way where both credit unions’ members’ interests come first.
I love the support of the CU movement but the antagonistic point of view that the member is the ultimate benefactor is potentially hyperbole. I pay taxes every year for services, schools, etc that I benefit from as well as others. We fund it, we elect the leaders to appropriate it, etc. but it would be insanely naive to think I “own” anything.
Being a member makes you a shareholder but in diluted ownership structures the members only own the CU in thesis only. The larger question which needs to be explored is “if members truly own the CU and want it to thrive, why are they not insisting that the credit union evolve and provide more differentiated products?”
The credit union movement – in my opinion – is in danger because most CUs do not know how to compete against the mega banks and they rely on a very outdated mindset that somehow the majority of people should be or are loyal to their FI. Unfortunately the “we care more” vibe CUs have long tried to use to differentiate themselves is a dead concept.
Credit unions must evolve and create bespoke products for members that truly matter. An auto loan and a debit card aren’t going to win the game.
With respect, it’s not too late to delete your comment. Tell me you don’t understand fundamental cooperative principles without telling me you don’t understand fundamental credit union principles. The credit union movement is in danger exactly because there are a number of our larger colleagues trying to act like banks. It’s like bringing a 3rd cola to market and expecting to compete in a market dominated by Pepsi and Coke. I don’t have the time or inclination to research the numbers, but after 30+ years in this game I would be confident in saying that for every credit union that merged for failure to maintain safety and soundness or even a failure to innovate, there are 2 or 3 very healthy shops that just grew tired of the hostile regulatory environment, had boards that became increasingly difficult to populate, or had no vision of the future. The key is to stay relevant to your members, and there is nothing more powerful than the one member one vote ownership structure. The taxpayer analogy is a non sequitur.