HARRISBURG, Penn./EAST WINDSOR, N.J.–The Pennsylvania Credit Union Association and the New Jersey Credit Union League have announced plans to merge and create a new trade group.
The two boards of directors entered into a non-binding letter of intent to bring the two organizations together in December 2018, and the membership of both PCUA and NJCUL will now vote. Membership votes will be held in early May and, if approved, the transaction will be effective January 1, 2020.
In the FAQs distributed to PCUA/NJCUL members as part of the proposal, the two associations said “Not only have the Pennsylvania and New Jersey been collaborating on programs for several years, the demographics of our memberships are similar, and our credit unions face the similar challenges and opportunities. Our boards, leadership, and executive teams have clearly demonstrated that they work well together. Putting our two teams together will result in great synergy, allowing us to better serve our combined membership.”
Proposed Management
The proposal calls for Patrick Conway, president of the PCUA, to become president and CEO of the new trade association, while NJCUL CEO David Frankil will become president of the for-profit service corporation. “Both Patrick and David will continue to work closely in setting policy for the new organization,” the two associations said. The two CEOs have created a video that can be viewed at https://vimeo.com/329140620.
The proposal says there will be no reductions in staff, and that a new name has yet to be chosen, although plans do call for a rebranding. The PCUA/NJCUL said they expect the improved scale will allow for expansion.
The proposal initially calls for the two boards to be combined, with all members to remain. The size of the board will be reduced over time to six from Pennsylvania and six from New Jersey, with even representation from both states and across all asset sizes, according to the merger proposal. Plans further call for a realignment of the dues structure over a two-year period. “There will be no increase in dues and some credit unions may see a decrease as we bring the two dues structures into alignment,” the organizations said.
‘Thrive Financially’
The PCUA/NJCUL added, “One of our objectives is to create an organization that will thrive financially, based on new opportunities and economies of scale. However, whenever you bring two organizations together, there are some one-time, upfront costs. Those costs will be incurred over the first two to three years. The combined organization will be very well capitalized, and projections for the next three to five years are strong.”
“Collaboration has long been at the heart of the credit union movement and a core value for both trade associations,” said Jeff DeBree, PCUA board chair and president and CEO of Penn East FCU, in a statement. “Joining together will result in greater scale and capacity to better deliver on everything we do. We will be able to invest more into products and services to help our credit unions grow and flourish.”
“As CEOs ourselves, we believe that our two organizations will be better together and provide compelling value and ROI to our credit unions,” said Andy Jaeger, New Jersey board chair and president/CEO of the Credit Union of New Jersey. “I applaud the directors from both organizations as well as our management teams for embracing this new model.”
The Pennsylvania Credit Union Association includes 392 credit unions. The New Jersey Credit Union League has 98 credit union members.