WICHITA, Kan. and KANSAS CITY, Mo.—The Kansas and Missouri Credit Union Associations are hashing out a new alignment that would join the two state leagues together. But whatever you call it, don't call it a merger.

"It's definitely a consolidation and we will probably file for articles of consolidation versus merger," said Don Cohenour, president and CEO of the Missouri Association (MCUA). "The plan is to create a new entity going forward doing some things we're doing now, but doing some of the things we're not doing now so that we can do it with a larger base."

The two leagues have already signed a letter of intent to form a consolidated organization, but the process is still in its early stages and will require a vote from member credit unions in each state—something Cohenour and KCUA President and CEO Marla Marsh hope can move forward by summer 2015.

"I would imagine that if the membership votes for approval that we'll start literally putting the organizations together, and by year-end 2015 it will be completed," said Cohenour.

According to Marsh, discussions about aligning the two organizations began more than a year ago when the pair worked on a task force together and realized how much they had already done together, as well as heard success stories from other joint leagues.

The pair said that it is too soon for them to be able to discuss whether any savings will be achieved as a result of the consolidation. They noted that there may be some efficiencies in the compliance space by combining their efforts, but that won't be at the expense of the compliance services they provide to credit unions.

"We've been charged by our membership and our boards to look for ways that we can bring the value proposition to a higher level, but at the same time be efficient and watch for cost-effectiveness as much as possible," said Marsh.

No decisions have yet been made on how the organization will be staffed, but the duo indicated that there likely would not be any staffing reductions as a result of the consolidation, though they were unsure if additional staff would need to be added.

The two leagues have not yet determined where the new organization will be based, and some parts of the two states are more than 650 miles apart. Marsh emphasized that members of both leagues expressed appreciation "that we have boots on the ground and that we're not just a virtual association."

Similarly, Cohenour noted that even though MCUA's headquarters are in St. Louis, he spends most of his time working in Kansas City.

"We don't want to be virtual, but we can be," he said. "But at the same time, we understand that the credit union space is very much a touchy-feely relationship business, and we have field reps and consultants that we send out to the credit unions, and we work with them on a daily basis face-to-face in their offices. We recognize that if we're going to serve our members in the way that they want to be served, we have to be where they are."

One thing that won't be changing is a focus on advocacy, and both Marsh and Cohenour said the new league will be committed to maintaining a heavy presence in both state capitols, particularly since the two states are heavily state chartered.


With Our Powers Combined…

One benefit to the new alignment, said Cohenour, is the joint league will be able to do some things that the two individual leagues have not been able to do.

One element of that will likely involve increasing its presence in the payments arena. Both leagues currently operate share draft processing centers in Wichita and St. Louis, respectively, for members' checks, and "with the 230 credit unions we'd serve, we see a very real need for being a bigger part of participating and working with our credit unions as we advance in payments systems, and helping credit unions wade their way through that mish mash of information and what they should be doing to continue to serve their members." That's especially important, he added, given the advances happening in the payments arena right now with EMV and competition in the mobile wallet space.

Having a wider network of credit unions will also allow the new organization to do more in the area of research and development, said Marsh.

"We individually are not able to facilitate some of the product development networking and collaboration among credit unions as easily as a small group as we will be as we extend to 230 credit unions," she said. "That's going to be a component of the new organization—to dedicate some work to research and development, both trend analysis and also facilitating those discussions and getting market research done."


The Wave of the Future?

A joint Kansas-Missouri league would join a cavalcade of states consolidating their league operations, such as the Carolinas CU League (representing North and South Carolina together) and the Cornerstone CU League (representing Texas, Arkansas and Oklahoma), both of which are less than two years old.

Marsh and Cohenour consulted with those leagues' staffs and others when drafting the plans for a new association, and also turned to a collaboration task force white paper that contains a collection of best practices from other leagues that have already gone through this process.

"We don't use that as our bible, per se," said Cohenour, "but there are some good examples in there."

With increasing consolidation in recent years, are credit unions already on a path to where individual state leagues might become a thing of the past?

Both CEOs dismissed that notion.

"There are some state leagues that are probably going to be here as long as any other organization," said Marsh. "I think it's a very individual decision by credit unions in those states, and as long as they have a value proposition that their member credit unions feel is appropriate, then … I think they work very well."

"We talk about consolidation of credit unions, and we've both been around long enough to remember when there were 25,000 credit unions, and now we have fewer than 7,000," said Cohenour. "I have credit unions in Missouri that have less than $1 million in assets and they've been around for 40 years. At what point in time did they say 'We can't grow, let's consolidate'? They didn't. They feel like they fit a particular niche and they're comfortable with that, and some leagues will always feel that way."

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