Search
 

The Credit Union Paradox of Giving All Equal Favor

The forces that would drive credit union consolidation are often thwarted by self-preservation.

By Peter Duffy | Updated on April 17, 2015
The irresistible forces that would drive credit union consolidation are often thwarted by the immovable object of self-preservation. This paradox may be the No. 1 strategic issue for most growth-minded credit unions that recognize the need for scale.

Credit unions of all sizes that lack accountability and motivation often live off the capital built over years of member loyalty, even though those members would benefit, through better rates and enhanced services, from a combination with a stronger credit union. Absent the growth and greater efficiencies resulting from merger activity, top performing credit unions are vulnerable to seeing their competitiveness deteriorate as banks add scale through both organic growth and consolidation.

The fact that capital is allowed to erode at some credit unions, while top performers seek access to additional capital, is a real irony. No one benefits from this irony, including potential acquisition targets whose best bargaining position comes from elevated capital levels.

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Recommended Stories

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2024 ALM Global, LLC. All Rights Reserved.