SAN DIEGO — What began last spring as a bid to create a roughly $13-billion Southern California credit union first bogged down in court and has now landed on NCUA’s desk amid a widening dispute over compliance and governance—leaving the future of a merger between San Diego County Credit Union and California Coast Credit Union deeply uncertain.
The two institutions announced in April 2025 they would combine under the Cal Coast name, with Cal Coast CEO Todd Lane leading the merged entity and SDCCU CEO Teresa Campbell planning to retire. They initially projected a legal close in early 2026 and full systems integration stretching into 2027, subject to regulatory approvals and a Cal Coast member vote. By November, however, SDCCU moved to terminate the deal, prompting Cal Coast to seek a temporary restraining order and later a preliminary injunction to keep the merger agreement in place.
In a detailed sworn declaration filed with the San Diego Superior Court, Campbell says SDCCU pulled the plug after discovering what she described as systemic compliance problems at Cal Coast during post-signing integration work and an October NCUA merger examination. She contends those issues reflected a “culture of non-compliance” traceable to leadership, and that SDCCU could not safely proceed without changes to management and governance—changes Cal Coast resisted.
The NCUA has now weighed in. Campbell says SDCCU received a Jan. 27 letter from Western Region Director Julie Cayse confirming that the merger “cannot proceed as originally conceived.” The letter suggests that significant remediation and close collaboration would be required before any revised transaction could move forward—collaboration Campbell says she no longer believes is feasible given the relationship between the parties.
Meanwhile, Cal Coast maintains publicly that the merger has not been cancelled. In member FAQs updated Jan. 29, the credit union says integration work has been “temporarily paused” while litigation plays out, that it remains well-capitalized, and that it is pursuing legal action to protect its contractual rights and keep the process moving.
The immediate next milestone is a Feb. 20 hearing on Cal Coast’s motion for a preliminary injunction. Cal Coast is asking the court to reinstate the merger’s interim operating covenants, which would require SDCCU to consult with Cal Coast (and in some cases seek agreement) before making major hires, incurring large expenses, or changing certain policies. SDCCU argues those restrictions would cripple its ability to run a nearly $10-billion institution, especially while the two credit unions are litigating and competing in the same market.
For now, SDCCU says it considers the merger agreement terminated and has resumed normal operations outside the deal’s constraints, while pledging not to take “drastic” steps—such as signing another merger—that would foreclose a court-ordered restart.
Michael Carlinsky, of Quinn Emanuel Urquhart & Sullivan LLP, which is representing SDCCU, said, "It is unfortunate that Cal Coast is unwilling to acknowledge its well-documented and repeated compliance failures as a clear deal-breaker for any prospective merger. SDCCU places the highest priority on consumer protection and its members' interests, and will not compromise its ethics or compliance by merging with Cal Coast. Indeed, just days ago, the National Credit Union Administration cited many of the issues discovered during SDCCU's post-signing diligence when it advised that, as of now, it is not prepared to approve the merger. Despite these facts, Cal Coast remains in a state of denial and continues to waste its members' resources on what appears to be CEO Todd Lane's self-serving litigation campaign to expand the size of his dictatorship. SDCCU must and will continue to protect all of its stakeholders by fighting Cal Coast's meritless actions through the appropriate legal channels.”
In an email sent to CUToday.info, Cal Coast Senior Director, Community and Public Relations Robert Scheid, stated Cal Coast "has always been in full compliance with all laws, rules, and regulations. We are routinely examined by state and federal regulators and audited continuously. Cal Coast remains well capitalized and financially strong. SDCCU’s characterization of the NCUA letter is inaccurate. It does not deny the merger. The letter defers a decision on the merger until the NCUA gets additional information and clarification. That step is not uncommon in complex transactions of this size and scope. While SDCCU continues to poison the well with inflammatory and personal attacks, Cal Coast remains focused on what matters most: serving our members, supporting our employees, and strengthening the communities we serve. These issues are being addressed through the proper channels, where facts, not rhetoric, will determine the outcome."