July 22, 2013


  • We have completed about dozen mergers. We have found that the sooner you integrate the two credit unions the sooner you will realize the benefits of merger. That means operating under one data processing system, one set of services, one culture, and one name. We are honest with the employees and map all of the employees to either a new job in the merged credit union or we help them find a new job. Everyone knows their future employment status. We usually offer jobs to all of the front line staff. Members appreciate having the staff they know continue to serve them. The back office staff is usually where you have to consolidate. But if you give outsourced assistance and generous severance, you will find that the merger will go well. We pay a bonus to employees who stay through the merger and data conversion so that there is less turnover even among those who won't have a job after the merger. The big advantage to a merger is that you have more to offer members. More services, more branches and better prices. We on-board merged members just like other new members and make sure they know about new branch locations, new ATM locations, and that they realize the benefits of the merger. That assures a high retention of merged members. We find that most merged members take advantage of more convenient branches and add new services that were not available before merger. The busienss grows because these members increase their credit union relationship. You should have a written due diligence check list. You essentially ahve to do a complete audit of the merger partner. You have to know that they have good compliance. For example, we often find that escheat policies have not been followed and so we know we have to clean that up. Likewise we find record retention to be weak. You are responsible for cleaning up all the things that have been neglected. We always schedule time in the merger plan to clean up problems.
    Henry Wirz