NAFCU, CUNA credit union trade groups agree to merge

The National Association of Federally-Insured Credit Unions and the Credit Union National Association have agreed to a merger provided their members vote in favor of it.

NAFCU and CUNA, the two most prominent U.S. credit union trade groups, announced Tuesday the combined organization would be called America's Credit Unions. 

Jim Nussle, president and chief executive of CUNA, would lead the combined entity.

"By bringing together these two powerful credit union associations we are doubling down on our commitment to ensure the growth and prosperity of all credit unions across the nation and the 137 million Americans they serve," Nussle said.

Members of both groups are expected to vote on the deal later this month. The board of directors and executive committee of each voted unanimously in favor of the merger in May; since then, NAFCU and CUNA have been focused on maintaining advocacy campaigns in the foreground.

America's Credit Unions initially would be guided by a 16-person board consisting of a mix of directors from CUNA and NAFCU. The merger is expected to be completed no earlier than January provided members approve it.

NAFCU was formed in 1967 as a direct membership association for federally insured credit unions. The group has since then played a major role in many policy matters, including lobbying for the 1970 passing of the National Credit Union Share Insurance Fund — which guarantees member deposits up to $250,000.

Dan Berger, president and CEO of NAFCU, said earlier this year he planned to step down but would remain onboard until year-end to facilitate the transition to new leadership.

"A new, singular association under Jim's fervent leadership will be able to harness the combined talent of both organizations to provide outstanding value to our members and ensure every household in America has the best credit union to serve them," Berger said.

CUNA traces its roots to the Credit Union National Extension Bureau, an advocacy group launched by industry pioneers Edward Filene and Roy F. Bergengren in 1921 to advance the awareness of credit unions across the United States.

At a meeting between Bergengren, Filene and credit union leaders from eight different states on March 17, 1934, the notion of a national association for credit unions was broached. A vote was held soon afterward to host a second meeting for drafting its bylaws.

In August of 1934, 52 delegates from 20 states and the District of Columbia finalized what would become the first constitution of CUNA. The Federal Credit Union Act, which enabled credit unions to be formed under government-issued charters across the U.S., was enacted that same year.

The two groups have courted each other for years but never finalized a merger deal until now.

In 2008, CUNA proposed a merger following the publication of a white paper titled "A Stronger and More Effective Single Trade Association for Credit Unions. The Time is NOW." The paper was signed by CEOs from USA Federal Credit Union, Western Federal Credit Union, Xceed Federal Credit Union, Bethpage Federal Credit Union, Financial Partners Credit Union and Mountain America Federal Credit Union.

Fred Becker, then president of NAFCU, expressed his opposition to the deal on suspicions that it was initiated by CUNA rather than credit union leaders. NAFCU's board of directors voted unanimously to reject the deal when it was originally proposed.

CUNA board members retorted that it was the then recent merger of the American Bankers Association and America's Community Bankers, as well as the lack of lobbying progress for reforms around the chartering process, that helped inspire the talks.

A similar proposal failed a year later.