Two Reasons Mergers Fail to Advance the Cooperative System

Mergers of sound and long-serving credit unions have two fatal flaws:

1. They do nothing to expand the credit union system or its market share. Basic merger math is 1 + 1 = 1. No new members are added, nor loans.  Employees leave and long term member relationships are disrupted.
2. Closing an independent operation with its own leadership and governance, reduces the industry’s human capital and innovation potential.                                                                                                                                        An analogy: If I have an apple and you have an apple and we exchange them, we both still have one apple. However, if I have an idea and you also have an idea and we exchange them, we both have two ideas.

Credit union leaders who serve in their positions for years and then seek a merger, inherited a vital legacy from their predecessors,  but have stolen it from their children.