Members of the Massachusetts State Employees Credit Union (MSECU) are one step closer to becoming members of Chelsea-based Metro Credit Union.
A merger agreement between the two was approved by MSECU members last week and is expected to be approved by Metro’s members early this week. If approved by members and regulators, the transaction is expected to close Sept. 1, Robert Cashman, Metro’s president and CEO, told Banker & Tradesman.
“It’s a regular merger,” Cashman said. “Their members become members of Metro. They maintain their branch at their current location and all their employees.”
Metro is about a $1 billion credit union, one of the largest in the commonwealth. It has about 140,000 members. MSECU has assets of about $60 million and operates 10 ATM locations statewide, along with a main branch in Boston. MSECU officials could not be reached for comment.
In 2011, Metro successfully merged with both Melrose-based Secure Credit Union and Boston-based University Credit Union.
Cashman said the latest merger makes sense for both institutions given the market and the regulatory environment.
“Obviously, credit unions right now, along with banks, or anyone in the financial services industry, is under a lot of regulatory pressure, and I think it’s wearing on credit unions and banks,” Cashman said. “Everyone in the industry is feeling that pressure, and combined with economic conditions, you need to have some size and substance to survive.
Rob Kimmett, a spokesman for the Massachusetts Credit Union League, said it is possible for small credit unions that serve employee groups to survive, but employers must “have stable workforce populations” and be able to “take advantage of operational efficiencies.”
“It certainly is possible for a single-sponsor credit union to survive, and in fact thrive, in today’s market,” Kimmett told Banker & Tradesman. If it can do that best by maintaining an independent charter, then that credit union can determine how best to deal with the operational, technological and marketplace challenges that every financial institution faces.”
Massachusetts’ credit unions have been making a variety of determinations in recent months.
Perhaps most notable is Brockton-based HarborOne’s decision to seek approval for conversion to a mutual bank charter. Gardner’s GFA Credit Union is in the process of acquiring tiny, troubled Monadnock Savings Bank.
Worcester-based Webster First Federal Credit Union got the green light earlier this month for its fourth merger in the past year. It expects to acquire 78-year-old, 1,700-member, $20 million Filene Federal Credit Union.
