It’s been a long engagement, but the Idaho Credit Union League and the Northwest Credit Union Association will marry by the end of the year – assuming at least half their 184 family members agree.
The Idaho Credit Union League (ICUL) started talking with the Northwest Credit Union Association (NWCUA) about a potential merger in January 2017. The two groups started with a management agreement, said Kent Oram, CEO of the Idaho Central Credit Union (ICCU), in Pocatello, and chair of the ICUL. “Size matters in today’s world,” he said. “We thought, why not partner with the surrounding states and pool our resources.” The ICUL started talking with other organizations two or three years ago, and the NWCUA made sense because of the geographic factor, he said.
The two organizations created a two-year management agreement for 2017 and 2018. After the first year worked out well, the boards of the two organizations agreed in December that they would merge, effective December 2018. The merger requires majority approval of their member 184 credit unions in three states – Idaho, Oregon, and Washington. Each credit union in the organization gets a single vote, regardless of its size. Both the ICUL and the NWCUA expect the merger to pass.
“More in the family means a stronger voice,” said Troy Stang, president and CEO of the NWCUA, based in Tigard, Oregon, with offices in SeaTac, Washington, and Boise. The organization has a staff of about 30.
Stang plans to spend the next six months doing town hall meetings with credit unions in all three states to answer questions about the merger, with the goal of a member vote by early summer. Members need 90 days’ notice of the merger, and “we want to put a bow on this by the end of the year,” he said. State approval is not required, he added.
Credit unions in the organization pay an annual fee that varies by their size. For example, ICCU’s $3.5 billion in assets means its annual fee is approximately $95,000. Most Idaho credit unions are smaller and so will pay a lower fee. The fee for joining the NWCUA will be slightly higher than ICUL’s, on the order of two to five percent, but “we’re getting a lot more for our money,” Oram said. According to Stang, “99 percent” of the credit union assets in the three states are affiliated with the NWCUA.
Services offered by the NWCUA include training in areas such as compliance, loans, and deposits, as well as advocacy on the state and national level, Oram said. “What’s most important to us is that we retained a local voice,” he said.
The NWCUA formed about seven years ago when credit union leagues in Oregon and Washington decided to merge, so adding Idaho to the mix made sense. “We all paid attention in geography class,” Stang said. For example, a credit union member who lives in Boise likely visits family in Ontario, Oregon, and visits credit unions there as well. “Consumer behavior doesn’t stop at state lines,” he said, adding that half of Idaho consumers are members of credit unions.
Assuming the merger passes, NWCUA will be governed by a board with up to 15 directors. Oram, as well as Trisha Baker, president and CEO of Lewis Clark Credit Union, and Dan Thurman, president and CEO of East Idaho Credit Union, are the Idaho leaders being recommended to the membership by the ICUL board. If all goes as planned, ICUL’s equity would be divided among direct rebate credits to ICUL member credit unions; a $500,000 donation will be made to the Northwest Credit Union Foundation for initiatives such as asset building, economic empowerment, and cooperative development; and approximately $1.2 million will go to the combined future equity of the continuing association.
Idaho banks and credit unions
According to the 2017 annual report from the Idaho Department of Finance, as of June 30 there were 23 credit unions under the department’s direct supervision, with seven new branches opening during fiscal 2017. In addition, one branch moved and one relocated, and two pair of credit unions merged. Finally, one credit union converted from being federally chartered to state chartered. They finished the calendar year 2016 with total assets of $4.77 billion, an increase of $587 million from the previous year – an annual growth rate of 14.03 percent, compared with a national growth rate of 7.37 percent.
On the banking side, the state directly supervised 12 commercial banks, as well as one business and industrial development corporation, plus 11 state-chartered banks operating in Idaho and chartered by other states. Four new branches were opened, four were closed, and two were relocated. One national bank converted to a state-chartered bank. They finished the calendar year with total assets of $5.1 billion, an increase of $500 million from the previous year – an annual growth rate of 9.2 percent, compared with a nationwide growth rate of 5.1 percent.