Credit union associations join forces to cut overhead

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As I reported on csbj.com last week, the credit union associations of Colorado, Arizona and Wyoming have signed a letter of intent to merge.

The point of the union is, as you might imagine, yet another sign of the times — figuring out how to run lean and efficiently. On the other hand, a merger would mean less in annual dues for the member credit unions, and, likely, more education and services.

But Mike Williams, board chairman for the Credit Union Association of Colorado, made the primary reasons for the merger perfectly clear.

“We hope to be able to eliminate overhead within the organization,” he said.

For starters, a merger would require only one CEO. At the moment, there are two between the three associations, because Wyoming has a management contract with Colorado.

“We’re working toward economies of scale and transferring that value to our members,” Williams said.

As trade associations, The Credit Union Associations of Colorado and Wyoming, both based in Denver, represent 80 Colorado credit unions, 25 Wyoming credit unions, more than 1.8 million members and $16.8 billion in assets.

The Arizona Credit Union League represents 51 credit unions, and more than 1.6 million members and $12.4 billion in assets.

Given their size, it’s easy to see why “we’re still working through all the fine details, crossing the Ts and dotting the Is,” Williams said.

The board hopes to have preliminary meetings by the end of the year, and bring the issue to a membership vote by the end of the first quarter, although it might not happen that soon, he said.

After the merger is approved, Scott Earl, CEO of the Arizona Credit Union League, will move to Denver — headquarters for both Colorado’s and Wyoming’s credit union associations — and become CEO of the new entity. Additional offices will be maintained and staffed in Phoenix and Casper, Wyo.

Earl said the timing is good for the Arizona association.

“We’ve been looking for ways to broaden what we can offer,” Earl said. “We believe by merging we can offer more products and services.”

From a group perspective, a merger would give the newly formed entity the “critical mass to attract vendors to the table — some group buying power,” he said. “We’ll get some synergy.”

One of his first priorities, he said, will be to provide a higher level of service to credit unions of all sizes.

“We hope to have greater resources to reach across all of those membership levels,” Earl said.

Member credit unions range in size from $1.5 million in assets with 100 or so members to multibillion-dollar organizations with thousands of members.

“Regulations change so rapidly that it’s a constant battle to keep up with education,” said Marsha Tynsky, board chairwoman for the Credit Union Association of Wyoming. “We’re all looking at our bottom line.”

The merger would help Wyoming’s association build a wider network that provides more accessibility to training and technology, she said.

“The credit unions are excited and interested in this merger,” Tynsky said. “I think it will be a good deal for us.”

Central Bank & Trust, SBA loans

Central Bank & Trust has come sprinting out of the gate since opening in Colorado Springs as part of Farmers & Stockmens Bank in New Mexico.

Central Bank accounted for 15 percent of all Small Business Administration 7(a) loans in El Paso County as of June 30.

The bank ranked second in overall production for the county, behind the Wells Fargo/Wachovia group, which ranked first and had more than 18 percent of total production.

Although Central closed its first loan in February, it still grabbed the second spot for SBA lending, approving $4.74 million in loans since opening in December.

The bank has approved several business expansion loans, including several medical practices, and loans for the acquisition of a restaurant and a construction-materials company.

Central Bank & Trust and Farmers & Stockmens Bank are wholly owned subsidiaries of Central Bancorp, whose portfolio of financial services also includes wealth management, property and casualty insurance, mortgage origination, and title services.

Rebecca Tonn can be reached at rebecca.tonn@csbj.com or 719-329-5229. Friend her on Facebook.