Seven credit unions announced they bought banks in 2017, and in 2018, seven deals of the same nature were announced. Credit unions are becoming increasingly involved in community bank bidding – a trend that is expected to keep growing. While a credit union-bank merger may sound a bit like a modern take on Shakespeare's Romeo and Juliet, successful transactions can and do take place. The following are a few considerations for credit unions to keep in mind when acquiring a bank:

Member Retention

When financial institutions merge, there is always a risk some customers or members will be lost. This is especially true if aspects they value, such as convenience or personal relationships, are lost. Proactive communication and effective disclosures regarding impending changes can help. As it relates to mobile banking and other banking platforms, the credit union must consider the operational inconvenience and expense of having to change mobile deposit or online banking platforms. Tech transformations are not always easy.

Another credit union-specific issue: Field of membership. Will the target institution's customers qualify for membership in the acquiring credit union? Membership restrictions could require the member to live or work in a certain county or state, while the acquisition target may have multiple branches outside the field of membership. While the credit union can seek to expand its field of membership, this may be denied and is often time consuming. An alternative option is to negotiate the sale of branches falling outside the acquiring credit union's membership requirements. Ultimately, an acquiring credit union must ensure it is operationally capable of servicing the combined membership.