The Delaware Credit Union League is moving toward a merger with New England-based cooperative.
The league last month announced that its member credit unions will vote in June on a merger with Cooperative Credit Union Association. The association serves credit unions in Massachusetts, Rhode Island and New Hampshire.
The league provides services to credit unions in Delaware.
“The decision to merge the DCUL was not taken lightly by our board. They watched as a struggling economy and heavy regulatory burden continued to take a toll on the number of credit unions in Delaware,” stated Delaware Credit Union League CEO Pat Mahaney. “This, in turn, impacted the ability of the DCUL to meet their mission of providing the necessary services, assistance, education and advocacy needed by credit unions.”
Mahaney went on to note The DCUL has fewer than 20 member credit unions and that a merger with the Cooperative Credit Union Association will increase that number to more than 180. In past years, the state had upwards of 40 credit unions.
“More of the products and services that credit unions require to satisfy the needs of their members (consumers) will become viable and affordable options for our credit unions. Equally as important, the employees of our credit unions will find many more opportunities for professional development through the expanded educational resources that will be available,” the Credit Union League president stated.
The league’s “Together” publication reported the merger is subject to approval by members of the league. That vote is expected to come next month.
Mahaney said in a Together story that CCUA’s model will preserve the local culture of Delaware credit unions while adding core services DCUL could not provide on its own.
“The cooperative’s model is much like a cooperative structure. Local control, local branding, but with the support of the Cooperative’s resources providing a strong menu of core services,” he wrote.
Credit unions are owned by members and fill a niche left by small community banks that have been disappearing, due to mergers.
At the same time, employee groups at DuPont and other employers that formed the base of credit unions in Delaware have disappeared or become too small to operate independently. That has led to numerous mergers that mirrored what has taken place in community banking.
The larger credit unions in the state have been adding branch offices and moving to community charters as members seek services such as check deposits through mobile devices, online banking and access to automatic teller machines without high fees.
Banks have long criticized credit unions for offering banking services without paying income taxes while at the same time gaining charters that allow offices in larger geographic areas.
After the financial crisis of 2008 and 2009, efforts to restrict credit unions seemed to loose steam as smaller banks merged into larger competitors.
A recent report indicated that banks and credit unions have an opportunity to build ties with their customers/members by becoming a partner in managing finances.
Credit unions are also seen as an alternative for “unbanked” individuals and families and those who turn to payday lenders with interest rates running into the hundreds of percentage points.
The newest credit union in the state, Wilmington-based Stepping Stones was formed to provide a savings, education and financial services alternative.
