Cal Poly Federal Credit Union, which serves California Polytechnic State University in Pomona, Calif., has announced plans to merge into SchoolsFirst FCU in Santa Ana, Calif., citing the challenges of providing adequate banking technology as well as facilities concerns.
“With a single branch, the credit union’s ability to expand is limited,” Lita Patel, chair of the Cal Poly FCU board of directors, wrote in a notice to members. “Additionally, the credit union will likely be forced to relocate to a significantly more expensive location at a future date since the university is seeking a larger financial institution to occupy the current space. This, coupled with the limited ability to create new technology-driven products and services for the membership related to scalability constraints, make SchoolsFirst Federal Credit Union an outstanding choice for a merger partner.”
It is unclear if SchoolsFirst is in discussions to take over as the university’s new banking partner. Representatives at the credit union did not immediately respond to a request for comment.
In the unlikely event that the merger is not approved, CPFCU said, the credit union will need to find a new partner or risk being liquidated by the National Credit Union Administration, since its lease has expired and will not be renewed, and management has not been able to find a suitable replacement space.
The deal would see Cal Poly’s 2,700 members join California’s largest credit union and the fifth-largest in the country. SchoolsFirst holds assets of more than $22.6 billion.
Regulators have already approved the transaction, which awaits a member vote in late March.
CPFCU added that merging with SchoolsFirst will offer members an expanded branch network, additional products and services, and more. Cal Poly FCU staff are expected to be offered positions with the larger institution once the merger is finalized, though CEO Barbara Bean plans to retire. The two credit unions expect to be fully integrated sometime this summer.
Cal Poly Federal has assets of $18 million. It lost nearly $14,000 in 2020 after earning more than $77,000 the year before, as lending contracted and noninterest income declined.
