NEW CASTLE, Del. (4/4/13)--Since the year 2000, Delaware has seen the merger of almost 20 credit unions.
The most recent merger of two Delaware credit unions occurred in mid-March, with $5 million Preferred Financial FCU, Wilmington, merging into $44 million Eagle One FCU, Philadelphia. This month Eagle One will acquire $9 million Lancaster (Pa.) Postal Employees FCU, the Delaware Credit Union League said (DELCU News
Reasons for the mergers cited by the league include:
Member demand for additional services. For merging credit unions, the ability to provide expanded services to members was most frequently cited reason for joining with another credit union, the league said.
Financial constraints of small credit unions during a sluggish economy. Nancy Gregory, CEO of Preferred Financial Federal CU, cited this as one reason for her credit unionʼs merger with Eagle One FCU.
Compliance costs. Compliance is a fixed cost, regardless of a credit union's size, Bill Hampel, Credit Union National Association senior vice president of research and chief economist, told the league. Small credit unions may feel the need to merge with larger institutions to manage the additional paperwork, Hampel said.
Field of membership erosion due to industry trends, company decline or aging membership. When the Chrysler plant in Newark closed, Delpart FCU, which served Chrysler employees, merged with American Spirit FCU, also of Newark.
Lack of interest in volunteer positions. The board of Hercules FCU, Wilmington, decided to pursue a merger with $116 million Community Powered FCU, Bear, rather than look for a successor for its retiring CEO. The credit union also had difficult time finding new volunteers to fill board and committee positions.