Hoosier Hills CU Members Reject Merger With Centra Credit Union

Members of the $926 million Hoosier Hills Credit Union in Bedford, Ind., rejected a proposed merger with the $2.2 billion Centra Credit Union in Columbus, Ind., last week.

“The preliminary vote results released by the third-party administrator indicated that the majority of Hoosier Hills members who voted are not in favor of merging with Centra under the terms of the agreement as outlined,” HHCU said on May 23, the day after the member vote.

In an interview with CU Times, HHCU President/CEO Travis Markley said more than 1,400 primary members voted but he declined to release how many of them voted for or against the proposed consolidation.

“I do think that people would appreciate knowing that final number, but with the results only being a few days old, we’re still making sure that we’re validating all of the ballots, and we’re making sure that we’ve got the proper count,” Markley said.

He indicated the vote tally would be released once all of the ballots have been accounted for and the validation process is completed.

Markley said he was a little surprised and disappointed that the members turned down the merger proposal.

“Unfortunately, some misinformation continued to circulate despite our efforts to correct that misinformation, but the good news is that we’ve got an incredibly passionate bunch of members that really like their credit union,” he said. “And they don’t want to see it change.”

As an independent credit union, Markley said HHCU is an “incredibly strong organization,” but the proposed consolidation was about preparing for the future in that it would have strategically positioned the long-term viability of both credit unions for future generations.

Indeed, the combined organization would have managed more than $3.1 billion in assets with nearly 200,000 members that would have made it the fourth largest financial cooperative in Indiana by assets.

Social media comments from HHCU members showed that some of them were glad the merger was rejected.

“Great news. We like HHCU the way it is,” wrote one member on the credit union’s Facebook page.

“I am glad we are staying the same,” wrote another HHCU member.

But other HHCU members were angry they didn’t get to vote because they were not primary members.

“I’m glad the eligible voters made their voice known,” wrote one HHCU member on social media. “As a joint account member of 36 years, I was not allowed to vote. This has left somewhat a bitter taste in my mouth.”

Under Indiana’s Credit Union Act, however, only primary members who have purchased a share from their credit union are permitted by law to vote on a merger question, Markley explained.

Under the proposed merger agreement, Centra Credit Union members also are required to vote, which is scheduled for June 3.

“As a matter of formality, Centra has decided to proceed with our member vote on June 3, allowing our members to use their voice,” CCU President/CEO Rick Silvers wrote in a prepared statement. “We appreciate your involvement in our credit union’s democratic process. While we are disappointed by this decision, we still strongly believe this merger partnership is in the best interest of members of both Centra Credit Union and Hoosier Hills Credit Union.”

He also noted that among many other benefits, the unified credit union would be positioned for future growth and sustainability, ensuring members in central and southern Indiana could be served by their local credit union for generations to come.

“However, we respect that Hooser Hills members voiced concerns about the partnership. It is now our responsibility to hear and understand their members’ concerns and move forward in a way that respects the wishes of their member-owners,” Silvers said.

Markley noted the CCU member vote would give the CCU leadership a gauge on how their members feel about the potential partnership with HHCU.

“If there is ever a future opportunity, that may matter in terms of where their membership stands,” Markley said.