One of Helen’s observations was, “The only thing worse than being blind is having sight but no vision.”
I received an email last night announcing a merger of a top ten credit union and one of the fastest growing credit unions (their term) in their market.
The release contained this triumphal statement: The combined credit union will serve 1.8 million members and operate more than 80 locations under BECU’s charter with more than $33 billion in assets. This will make it the fourth-largest credit union by asset size in the U.S.
The email also included a slick PR poster that made it appear that this was a done deal, between the two firms. The member-owners apparently have no say or voice.
This “fait accompli” approach suggests the continuing credit union has not looked at the track record of large credit unions whose growth strategy is mergers. They might want to review PenFed’s recent history as a start.
Only Two Turnovers from Failure
This haughty announcement also confirms the observation that every organization is only one or two CEO turnovers from failure. This was by a credit union leader who had witnessed countless changes in his four decades.
Failure in his view was not financial, but the end of an independent, sui generis, credit union. It occured as subsequent leaders lacked commitment to, and often knowledge of, the organization’s founding principles.
In tlhis case the continuing credit union had been led for over three decades by a CEO who could have chosen to merge multiple credit unions supported by his single sponsor. But that was not how he thought coops best served their members.
I’m sure there will be more to learn about this transaction as we get past the “people helping people” claptrap. With this swaggering start, the rest of the story will likely become another case study of credit union CEO’s and boards implementing “The Art of the Deal.”