With some predicting it's only a matter of time before the next state league consolidation is announced, CEOs are focusing on emerging collaboration projects and launching new products and services this year.

“Out of all the league consolidations, there hasn't been a non-contiguous state league merger, but eventually that is going to happen,” Patrick LaPine, president/CEO of the League of Southeastern Credit Unions and Affiliates in Tallahassee, Fla., said. “It may happen this year, who knows?”

In the meantime, however, league presidents say they plan to develop collaboration efforts and launch new revenue-generating products and services throughout the New Year that will enable their member credit unions to tackle marketplace challenges, streamline operations and tame the beast of compliance.

“Have I had some leagues [CEOs] that have said when I retire my recommendation is going to be to consolidate with you? Yes, I have had a couple of those conversations,” LaPine acknowledged. “I think for us, what we're really focused on is building greater collaboration by looking for opportunities through the service corporation side to be able to expand our markets and to help other leagues and league services corporations generate income and value in their markets. If we do that I think when [a league] looks to consolidate, we will be more of a natural pick because we would have already developed that trust on the business side.”

Dick Ensweiler, president/CEO of the nation's largest trade organization, the Cornerstone Credit Union League in Dallas, is also taking a similar posture.

“We have no current indications of other leagues that want to join Cornerstone,” Ensweiler said. “We are focused on making sure we are as good as we can be. I think people know the reason we picked the name Cornerstone is that we didn't want to be pegged to the southwest, but there is nothing in our strategic plan that we are aggressively pursuing other states. But if other leagues are thinking of joining Cornerstone, the organization would be willing to discuss it.”

To be sure, what will bring more leagues to the conference table are the economic realities of continuing market forces, including credit union mergers, shrinking league revenues and increasing operational costs, according to some leaders.

The most recent consolidations talks occurred in December when the boards of the Kansas Credit Union Association and Missouri Credit Union Association signed a letter of intent to consolidate in 2015.

In October, the Massachusetts Credit Union League, the New Hampshire Credit Union League and Credit Union Association of Rhode Island agreed to consolidate to form the Cooperative Credit Union Association in Marlborough, Mass., which officially opened this month and represented the eighth league consolidation since 2007.

“Part of the consolidation is certainly being driven by the fact that the number of credit unions is being reduced,” Don Cohenour, president/CEO of the Missouri association, said. “I think every state league is taking a look at what are the viable number of credit unions they can serve and do it effectively and efficiently.”

Like the Cornerstone league, Cohenour expects the new consolidated organization to take a generic name to attract other leagues to join it.

Read more: Leagues pursue other collaborative efforts …

For independent state trades such as the Illinois Credit Union League in Naperville, Ill., there is no talk of consolidating with another league, according to officials. Currently, there are 33 independent state associations.

However, in December, the Illinois league underwent what it called an operational merger of its staff at the league and League Service Corp., which came with the departure of three executives, including longtime LSC EVP and COO George Fiegle.

Sean Hession, president/CEO of the Illinois league, said he believes this new operational merger will enable the organization to respond more quickly to marketplace changes and introduce new products and services that in demand by league members and the more than 1,200 credit unions across the nation that are LSC customers.

In the first quarter, the Illinois league will offer a new compliance service that will allow credit unions, particularly small cooperatives, to streamline their regulatory and accounting filings and activities.

Other new products or initiatives planned by other trades include a new ID theft protection product by the Pennsylvania Credit Union Association and a marketing awareness campaign under development at the Cornerstone league to help cooperatives in Arkansas, Oklahoma and Texas attract new members. The New York Credit Union Association is preparing to introduce a prized-linked savings program and the Ohio Credit Union League is planning to promote a new compliance product to help its member credit unions navigate the regulatory morass.

On the collaboration front, Hession is negotiating with five other leagues to develop a big data project that will likely focus on membership growth and lead generation. He noted credit union growth stood at about 3% last year, which is double the historic average and is higher than the U.S. population growth rate of 1%.

“We are seeing very strong membership growth coming out of a down cycle,” he observed. “Credit unions usually are counter cyclical in that our membership growth often slows down as this point in the economic cycle and it's not. I think there is something deeper going on out there, so that's why we think we should do some of this big data work around how to engender more membership growth.”

Another collaborative initiative that is generating a lot of interest among leagues is Plexcity, a CUSO-like business that was established by CEOs of the California Credit Union League, Diana Dykstra, John Bratsakis of the Maryland-District of Columbia Credit Union Association, and Greg Michlig of the New Jersey Credit Union League.

Plexcity's collaborative idea is to combine and standardize back-office operations such as human resources, IT, accounting and finance, form the three leagues. In December, the Ontario, Calif.-based Plexcity integrated the human resource functions of the three organizations by standardizing employee benefits and payroll processing systems.

In Plexcity's first year of operations, the costs are expected to be slightly higher because of start-up expenses, as well as initial costs of standardizing the processes, Tony Kitt, Plexcity's CEO, told CU Times last June. However, in the second year and beyond, Kitt estimated the savings would be 15% to 20% and could be greater when other leagues join.

“I think that is one that a lot of us are watching closely,” LaPine said. “I think a lot of folks want to see how that comes together and to see if it really meets all of the expectations that have been placed on it. I think there are others that have had some topical conversations with that group and there are pieces we may be interested in.”

Kitt said he is confident Plexcity will be able to meet expectations and is talking to other leagues.

Read more: Illinois League CEO talks about restructure …

In December, Sean Hession, president/CEO of the Illinois Credit Union League, announced an “operational merger” of the staff at the league and its subsidiary, League Service Corp. The move included the departure of three executives, including longtime LSC EVP and COO George Fiegle.

Though Fiegle stepped down Jan. 2, he will continue as a consultant to Hession in the New Year. He was credited with growing revenue from $3 million in 1992 to more than $65 million at the end of 2014. LSC serves more than 2,300 cooperatives throughout 50 states.

Ron Culen, vice president for the league's regional management, and Gregory Framarin, director of educational development, left the league as well, according to the ICUL. Culen's position was eliminated. Melanie Murphy, former manager of the league's member services, replaced Framarin.

In an interview with CU Times, Hession acknowledged the merger was a difficult and significant change, in part, because for the first time, the league and LSC do not have a COO. Instead, an executive team will lead the two organizations that have been organized into three divisions.

Patty Smith, who was LSC's executive director of strategic accounts, is now the leader of the “market-facing brand, marketing and sales” for both LSC and the league. Tom Kane, who was the league's chief administrative officer, now leads the “internally-facing product infrastructure and delivery team.” He'll be responsible for operations, finance, IT and Creditor Resource Services, which is LSC's collection agency. Steve Olson continues to lead the league's office of general counsel and advocacy.

Other staff moves included Vicki Ponzo being promoted to SVP and special assistant to Hession. She served as SVP of the league's member services. Joni Senkpeill, who served as director of small credit union development, filled Ponzo's old position.

The league also is expected to name a new vice president of marketing who will report to Smith and a new SVP of development who will report to Hession.

“We have this great synergy that has been there [between the two organizations] for years, and years and years,” Hession said, who took over as league president/CEO last May. “We are not consolidating the two [organizations]. We are not doing away with the board. We are not doing away with the legal entities. We just want to capture some more of the synergy so that folks working more exclusively with the Illinois Credit Union League can get exposure to credit unions across the country [through LSC] and those with LSC can see what's happening with the league side.” —[email protected]

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