The recent announcement of two credit union league mergers could portend more to come as the number of U.S. credit unions continues to fall and the associations that serve them search for scale.
The number of federally insured credit unions declined to 4,903 in the first quarter of 2022, from 5,068 in the first quarter of 2021, according to data from the National Credit Union Administration. In the first quarter of 2020, there were 5,195 credit unions.
Those dwindling numbers have led to fewer member credit unions for the state leagues and associations that advocate for them. So some of those organizations have begun to merge.
The boards of the Cornerstone League and the Heartland Credit Union Association last week approved plans to
Heartland is the trade association for credit unions in Kansas and Missouri, while Cornerstone represents credit unions in Texas, Arkansas and Oklahoma. Cornerstone is the nation’s largest regional credit union trade association.
In addition, member credit unions of the Mountain West Credit Union Association, which represents credit unions in Arizona, Colorado and Wyoming, and the Northwest Credit Union Association, which represents credit unions in Idaho, Oregon and Washington, recently voted to approve a merger effective June 30. The new, six-state trade association will represent more than 300 credit unions.
“Credit unions need advocacy today, and we believe that the exploration of a merger with NWCUA gives us a path to swift and exponential impact. People need credit unions, and we must position ourselves to serve even more people through powerful advocacy,” Mike Williams, Colorado Credit Union's president and CEO, said in a press release.
These mergers are a direct result of the broader consolidation of credit unions, resulting in fewer dues-paying and service-buying credit unions in each state, said Dennis Dollar, a consultant and a former chairman of the NCUA board.
Just as scale is required to compete as a credit union in today’s marketplace, so is scale required to be effective in offering support, services and advocacy through a trade association, he said.
“It’s more than 'one and one is two' in a scale-driven game,” he said.
Cornerstone League President and CEO Caroline Willard said that while credit union mergers are a part of the changing landscape that factor into league mergers, they are not the driving force or the sole cause.
“Due to shifting consumer behavior and the ever-changing economic and political landscapes, it would be prudent of all credit union leagues and associations to consider their options for sustainability. That includes merger exploration,” she said.
Willard said the league has been through a merger before and can lean on that experience this time around.
In 2013, the Texas Credit Union League, Oklahoma Credit Union Association and Arkansas Credit Union Association combined to form Cornerstone.
Other recent merger announcements have also provided a bit of a blueprint.
In 2019, the Pennsylvania Credit Union Association and New Jersey Credit Union League announced
Michael Wishnow, CrossState’s senior vice president of marketing and communications, said the strongest case for combining the organizations was to be proactive in building value for credit unions in both states.
“As a result, we created one of the largest regional credit union trade associations in the country with greater scale and a broader range of product and service offerings for all members regardless of asset size or geography,” he said.
Collaboration between leagues and associations appears to be a natural evolution as the number of credit unions decrease, creating larger and more complex organizations, according to Wishnow. “As an association, we need to ensure that we have the appropriate level of scale and sophistication to serve a growing credit union system,” he said.
Though the leagues give up the perception of having a small, local expertise, they make up for it in scale.
“In our first two-plus years as CrossState, we have received the benefits of a larger, stronger exceptional advocacy team, while retaining and building upon our strong relationships in both New Jersey and Pennsylvania’s state capitals,” he said.
Willard said that along with a merger comes the possibility of expanding the league’s talent pool, and that can create opportunities for innovation and more depth when a leadership position opens up.
“And with a boots-on-the-ground presence in each state capital and a robust engagement infrastructure, a combined entity will only enhance the league’s local touch while also strengthening our influence as a larger regional league,” she said.
