ST. JOSEPH, Mich. — Why would NCUA sell a failed credit union in Reno, Nev., to a credit union 1,996 miles away in Michigan?
"We don't see any geographic barriers to making this work," said United FCU's Duane Nelson. "We already have offices in Arkansas, Ohio and North Carolina, so we have a lot of expertise in this kind of thing." NCUA agreed. "The ability to continue providing quality service to members is our primary concern and not the geographic location of the acquiring CU's headquarters," agency spokesperson John McKechnie said. "The acquiring credit union has had extensive multi-state operations for much of its existence and has a demonstrated ability to serve its members."
The $940.6-million United FCU is excited to be getting into the Reno market, despite its unemployment rate of 13.5%. "The growth opportunity in Reno is real strong," Nelson said. "According to the U.S. Census Bureau, Reno has grown 20% in the last eight years, while we're not seeing a lot of people move to Michigan. We needed to find another growth area. Plus, Nevada is a much friendlier business environment They're seeing a lot of businesses move in from California."
And while United, with a net worth ratio of 12.78%, isn't actively looking for more acquisitions, it has let NCUA know it's open to more of the same. "This does cause a stress point on our resources, so we are careful," Nelson related. "We had a credit union ask us if we would be willing to partner with them, but we told them that we would have to put that off, at least for now. NCUA knows we're open. We are always open to mergers or acquisitions, so long as it makes sense for our members."
Though it's the story of a credit union in Michigan taking over a credit union in Nevada, Nelson was quick to point out that Clearstar members would still see local management and control. The previous CEO departed several months ago, and the board was dissolved when regulators shuttered the institution Sept. 25, but Clearstar COO Lynn Lundahl is now United's Nevada regional president and will run day-to-day operations locally. "We haven't reached out across all our branches [outside of Michigan to recruit board members] but for the first time we are now looking at having advisory board in Reno."
Indeed, if anything, Nelson insists control will actually be, in at least one way, more local than it was before. "Clearstar had been too dependent on third-party providers, and we're changing that," he said.
