NCUA Approves Small Michigan CU Merger Without a Member Vote

Without a vote of its 2,728 members, the NCUA approved the merger of the $32.1 million Gabriels Community Credit Union in Lansing, Mich., with the $7.6 billion Michigan State University Federal Credit Union in East Lansing.

“The NCUA approved the merger between the two credit unions on December 21, 2023,” a spokesperson for the federal agency said. “The conditions of the merger met regulatory provisions that allowed for a waiver of the membership vote.”

Although the NCUA did not specify those conditions, MSUFCU President/CEO April Clobes said the consolidation was approved by the federal agency and the Michigan Department of Financial Services because of “the extenuating circumstances of Gabriels.” She declined to say what those extenuating circumstances were.

“It was a friendly merger that was necessary,” Clobes said.

Two interim CEOs took over the credit union after former Gabriels Community CEO Malissa J. Richardson left sometime after the second quarter when she was listed as the CEO on Gabriels Community profile report filed with the NCUA. She held the top position since 2018 after joining the credit union in 2011 as director of operations.

In 2022, Richardson’s total compensation was $176,279, which included her base pay ($98,000), bonuses and incentives, ($42,500), nontaxable benefits ($26,322), and retirement/deferred compensation ($9,457), according to Gabriels’ IRS 990 form. When appointed CEO in 2018, her total compensation was $90,221, the credit union’s IRS 990 form showed.

During her CEO tenure, Gabriels Community financial performance reports filed with the NCUA indicated the credit union’s management ratios were mostly above its peer average, except for the first, second and third quarters of last year when its management ratios declined substantially into negative territory. The credit union’s annual financial reports also showed that the credit union was financially sound, having shown no annual losses until the second and third quarters of 2023.

Gabriels Community recorded a loss of $288,692 at the end of 2023’s third quarter compared to a gain of $487,612 at the end of last year’s third quarter, according to NCUA financial performance reports. At the end of the second quarter, Gabriels Community showed a loss of $106,622 compared to a gain of $346,112 in the second quarter of 2022.

In the first quarter of last year the credit union posted a gain of $56,122 and at the end of 2022, it recorded a gain of $856,047, NCUA financial performance reports showed.

CU Times efforts to reach Richardson by phone were unsuccessful.

Clobes said she did not know the circumstances surrounding Richardson’s departure.

After Richardson left, Heather Luciani, chief strategy officer at the $1.6 billion Honor Credit Union in Berrien Springs, temporarily took over the top position.

“Honor had assisted Gabriels with their core software in the past. Honor offered to assist in a temporary situation until a merger partner could be identified,” Clobes explained. “We agreed to the merger based on the proximity to our branches for their members to continue to be served locally and with additional branches in their market. And, they had a branch in Jackson where we do not, but we have 5,000 members in Jackson and 10,000 members within 30 miles of Jackson, providing our members with an additional conveniently located branch location. Amy Coe is an MSUFCU Vice President who served as interim CEO after Heather until we received NCUA approval.”

MSUFCU has also closed Gabriel Community’s Lansing branch.

The merger was initially announced by MSUFCU in November.

Gabriels Community was chartered in 1957.