In what was billed at the nation's largest league collaboration, the League of Southeastern Credit Unions & Affiliates and the New York Credit Union Association said Monday they have amicably agreed to suspend their partnership.
LSCU and NYCUA had signed a letter of intent in October 2015 to form a jointly owned subsidiary, League Consolidated Services, to combine the leagues' back office functions and other operations that were not state specific.
The leagues had set a goal to open the new subsidiary by Jan. 1, 2017 that would have established the nation's largest league collaborative structure, which would have included more than 650 credit unions in Florida, Alabama and New York that manage more than $142 billion in assets and serve approximately 12 million members.
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Over a three-year period, both leagues were projected to save of millions of dollars in operational costs, Bill Mellin, president/CEO of the NYCUA, estimated in October 2015 when the partnership was announced.
Between October 2015 and this summer, however, the prospects of the partnership fell apart.
At the conclusion of a joint LSCU/NYCUA board planning retreat last week in New Paltz, N.Y., it was the consensus of both association boards that alignment could not be achieved at this time and to suspend further integration, according to a join prepared statement.
Although the leagues did not say what specific factors led to their decision, Patrick LaPine, president/CEO of the Southeastern league, hinted culture became a major obstacle.
"The leadership and staff of both organizations have worked extremely hard during the last year to make this vision a reality," La Pine said. "Unfortunately, culture trumps strategy, and we were not able to move the project forward. I still believe strongly in the collaborative LCS model. While disappointed, my respect for the NYCUA and my admiration for its President/CEO Bill Mellin have not changed."
Mellin also said he was disappointed that the partnership did not come to fruition, but he noted the opportunity to work through the process will make both organizations prepared for future partnerships and collaborations.
"LSCU is a strong organization, which is reflective of their strong leadership," Mellin said. "I wish Patrick and his leadership team every future success."
What's more, in the Aug. 1, edition of the Southeastern league newsletter, eSignal Daily, LaPine briefly outlined a recent third-party review of LEVERAGE, the league's service corporation. The review focused on LEVEAGE's internal operations.
"The conclusion of the study was LEVERAGE's business model needs to be re-engineered to become a more disciplined sales company with all functions working in better coordination," LaPine wrote. "The study also noted that a leader is needed (now hired with Steve Willis) with a successful track record in sales in the for-profit world, who is also well versed in the credit union culture. I believe if we stay true to the recommendations of the study, LEVERAGE will be a much more effective revenue generator for LSCU & Affiliates and a better provider of solutions for credit unions."
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
