MONTPELIER, Vt.–With its former CEO and former board members publicly objecting to its proposed merger, the chairman of Vermont State Employees CU has now gone public with a defense of the merger.
As CUToday.info reported here, a group of people has created a website and been very vocal in the proposed merger of the $1.088-billion Vermont State Employees Credit Union with $1.94-billion New England FCU. The two CUs are the largest in the state, and opponents are stating there are no good reasons to combine.
But Spencer Newman, chairman of VSECU, wrote on VTDigger.com—where the CU’s former CEO had earlier published an op-ed in opposition to the deal—that the credit union is “unanimously, and enthusiastically” in favor of merging because “combining our capital, talent and knowledge will create scale and greater social and economic value for our members and the real Vermont economy.”
A ‘Rich History’
“Like VSECU, originally created to serve the employees of the Vermont state government, NEFCU was created to serve employees of IBM, located in Essex, Vermont,” Newman wrote. “Both have a rich history that has evolved since inception to better serve members and ensure relevancy for the unforeseeable future. Both organizations’ logos, business approach, leadership and membership base have changed with time, but one thing has remained constant — creation of value for their members.”
Newman wrote that “changing is inevitable” and that the financial services landscape has “changed drastically in the last decade.”
“Out-of-state banks are entering Vermont and extracting our local dollars into a national financial system and moving decision-making out of Vermont,” stated Newman. “Financial tech companies are changing the face of the banking industry, such as Square, Venmo, Acorns, Paypal, Chime, and even Apple, Google and Amazon.”
Newman added that consumers want more relevant, personalized, faster and better engagement, with products and services both in person at branches and online.
‘Time is Ripe’
“The time is ripe to lean into our cooperative principles and business model with foresight and strategic leadership to ensure Vermont’s independence in the financial system and financial inclusion for all Vermonters,” Newman stated. “This partnership between VSECU and NEFCU reflects something to celebrate. It is a strengthening from within Vermont for Vermont. Our memberships will join and become 160,000 strong, most of whom are our neighbors, families and community members in Vermont, keeping our dollars local and lifting each other up to experience financial security and independence. We are stronger together. This is the Vermont way.
“Cooperatives thrive when more members participate. It’s no secret that we live in one of the most aging states with zero to low population growth,” he continued. “Combined, we will expand our generational membership, which is critical to balance equity and affordability between savers and borrowers.”
Other Points Made
Other points made by Newman in his post:
- Combining the mortgage operations of the two credit unions will provide more opportunities for homeownership for members
- With the MBL cap of 12.25% of assets, combining the two CUs will add an additional $113 million available for business loans
- The merger will enhance both CUs’ commitment to the landscape and environmental preservation of Vermont. “VSECU is a leader in green energy financing and NEFCU a leader in mortgage financing. Folding these two areas of expertise into one experience will help more Vermonters attain affordable and environmentally conscientious homes and support Vermont with its net zero energy goals,” Newman stated.
- Members will have access to eight additional branches.