National Credit Union Groups Merge to Form ‘America’s Credit Unions’

Two national credit union associations are merging to create a new advocacy group.

Members of the Credit Union National Association (CUNA) and National Association of Federally-Insured Credit Unions (NAFCU) have voted to join forces to become America’s Credit Unions, the groups said in a news release provided to PYMNTS Thursday (Nov. 2).

“This merger is a historic opportunity to transform credit union advocacy at the federal and state levels and take the industry into the future,” the release said. “The new association will bring together the best of both organizations to offer exceptional services to credit unions so they can best serve families and small businesses across America.”

According to the release, 94% of the CUNA members and 86% of NAFCU members who voted were in favor of the merger.

Jim Nussle, president and CEO of CUNA, will take on the same role at America’s Credit Unions, which will legally be formed Jan. 1 of 2024.

The formation of the new group comes at a time when credit unions themselves are increasingly merging amid a tough economic environment.

The first quarter of 2023 saw 33 CU mergers approved by the National Credit Union Administration (NCUA), a continuation of a trend that has been growing ever since the pandemic. There were 58 mergers in the second quarter of last year, for example, up from 43 in the same quarter of 2021 and 34 during Q2 of 2020.

“The reasons for these mergers have varied by case, but a clear pattern of financial distress has emerged,” PYMNTS wrote in August. “Four of the Q3 2022 mergers were motivated by CUs’ inability to obtain officials, three by poor financial conditions, two by unsustainable lack of growth, and one each by poor management and lack of sponsor support. All of these can be traced back to financial hardship of some degree.”

Meanwhile, PYMNTS looked at the challenges and opportunities facing credit unions earlier this week in an interview with Denise Stevens, senior vice president and chief product and digital officer at credit union services organization PSCU.

Among those challenges: the need to compete effectively to capture a significant share of the financial services market in the middle of a shifting macroeconomic landscape.

Credit union members are typically more discerning and sensitive about rates, making it essential to offer competitive interest rates and terms.

“Credit unions need to be super-focused on making sure they are competitive on price and flexibility,” Stevens told PYMNTS CEO Karen Webster.

“Despite the digital shift that has happened, I think credit unions did a pretty good job maintaining a mix of digital and human interaction and capitalizing on that strategy by leveraging established relationships through ongoing communications with members and proactive follow-ups,” she added.