Billion-Dollar CUs Create Third Largest Financial Cooperative in Virginia

The merger of Member One Federal Credit Union in Roanoke, Va., with Virginia Credit Union in North Chesterfield, Va., became legally effective today, creating the third largest financial cooperative in the Old Dominion commonwealth that will manage $6.9 billion in assets with more than 1,100 employees who will run 37 locations and serve 485,414 members.

Member One reported on Tuesday that 3,479 members voted in favor of the consolidation and 1,404 members voted against it.

“‘Better together.’ That’s been our theme and vision as we’ve worked together the last several months in pursuing approval for our merger,” VACU President/CEO Chris Shockley, who will remain president/CEO of the combined organization, said in a prepared statement. “Now, we’re excited to move forward together, with our combined resources and talent empowering us to fulfill our mission to serve members, deliver best-in-class products and services, and support the communities we call home.”

But some Member One members, who organized to oppose the merger, created a dedicated website to explain why they were against it. The following six reasons were posted on the site:

1. There are no real benefits for members;
2. This is bad for the Roanoke Valley;
3. VACU is only after the numbers;
4. Different culture, different fees;
5. You will become a number, not a member; and
6. You are not being communicated with.

Dwight Holland, who was a former seven-year Member One supervisory committee member and served two of those years as its chair, said he was opposed to the consolidation because members will lose local control and influence in the governance of the credit union.

“We are being swallowed by a bigger fish,” Holland wrote. “The smaller fish in the pond of merger always loses its identity, culture and influence with time, despite promises by the board and CEO of both credit unions.”

He also noted that Member One is an overall well-managed credit union that has grown to $1.2 billion in assets.

“Why surrender this local achievement and control to a financial entity in Richmond?” he wrote.

Jean Elliott took exception to the merger-related financial arrangement for Member One’s top executives.

But when the merger was initially announced in January, Shockley said becoming a larger organization with more locations, more talent and more resources will ultimately result in greater economies of scale, which he described as a good thing.

“What becoming larger does not mean, however, is that we sacrifice our mission and our purpose,” Shockley said. “We would continue to invest in our members, our people and our communities.”

But Jean Elliott took exception to the merger-related financial arrangement for Member One’s top executives.

“The ‘incentives to stay’ at the end of the meeting notice (document) seem extraordinary – why is such an incentive needed? There would certainly be others available to hire who are well qualified should these people choose not to stay,” Elliott wrote in his statement posted on the the NCUA’s comments page. “Well more than a half million dollars is being promised to these five individuals! That amount would best serve members in so many other ways: beefing up certificate and savings rates or assisting those who need loans, for example, would certainly serve the members better than this huge amount flowing into individual pockets.”

Frank Carter, president/CEO of Member One, will receive a $250,000 retention bonus. Until he retires, he will be working for VACU as a senior executive business advisor.

Jean Hopstetter, Member One’s senior EVP, will be eligible to receive a retention bonus totaling $95,000 and payable in three installments if she remains with VACU for 18 months following the merger date. VACU will employ Hopstetter as the senior EVP and merger integration executive, according to Member One’s merger documents filed with the NCUA.

Member One CFO Alan Wade will be eligible to receive a retention bonus totaling $82,000 and payable in three installments if he remains with VACU until Dec. 31, 2025. His new title at VACU will be EVP.

Member One EVP Tim Rowe will be eligible to receive a retention bonus totaling $80,000 and payable in three installments if he remains with VACU for 18 months following the merger date. He will be employed at VACU as a market president.

Jeff Wieczorek, Member One’s chief information officer, will be eligible to receive a retention bonus totaling $68,000 payable in three installments if he remains with VACU for 18 months following the merger date. VACU will also employ him as its chief information officer, according to Member One’s merger documents.