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Mendo Lake, Fort Bragg credit unions consider merger; process will assist growth, expand services
NORTH COAST, Calif. – Two North Coast credit unions are in the process of considering a merger.
After several months of exploration and thoughtful negotiation, the boards of Fort Bragg Community Federal Credit Union (FBCFCU) and Mendo Lake Credit Union (MLCU) have signed a memorandum of understanding for FBCFCU to consider a merger with MLCU, officials said Friday.
“The combination of our two organizations makes sense from the standpoint of both member service and long term financial stability and helps preserve a truly local cooperative option for financial services in Fort Bragg,” said MLCU Chief Executive Officer Richard Cooper.
Credit union officials said the desired result of this merger process is to combine the energies and resources of the two credit unions to assure the best and most comprehensive credit union services to members on the Mendocino County coast.
As cooperatives, this process is not like the merger of two shareholder controlled institutions where there is a profit motive for either or both parties, credit union officials reported.
Instead, a merger of cooperatives is designed to assure the best in ongoing service to the continuing membership.
As the costs of providing the myriad of financial services that members want and need grows – and as the low interest rate environment continues to challenge earnings – a larger but still moderately sized local institution will be better positioned to provide a higher level of ongoing service.
Should the merger be finalized, officials said the combined organization would be more than $160 million in total assets and serve more than 23,000 members.
Out of that total, the proposed combined Fort Bragg branch of MLCU will have more than $50 million in deposits, more than $26 million in loans and will serve more than 7,000 members.
The proposed merger will provide FBCFCU members a range of new and expanded services, including small business deposit accounts, home equity lines of credit, mortgage loans, manufactured home loans (in parks), recreational vehicle loans, additional deposit account options, insurance services and access to more than 30,000 free CoOp ATM locations located across the US.
Member deposits will continue to be insured to $250,000 by the National Credit Union Share Insurance Fund, a U.S. Government Agency.
As the merging credit union, FBCFCU members will be given an opportunity to vote on the final merger agreement, with a full disclosure of all merger details provided to members prior to the vote.
Pam Merritt, president and chief executive officer of Fort Bragg Community Federal Credit Union, noted in her letter to the membership, “The cost associated with offering the variety of services Mendo Lake Credit Union will be able to offer is much more than a smaller credit union of our size can undertake. The merger of our two credit unions will keep the local credit union ‘feel’ that is so very important to our members and community.”
MLCU has been serving member financial needs since 1959, with offices in Fort Bragg, Ukiah, Lakeport and Clearlake. Should the merger be completed, MLCU will assume FBCFCU’s assets and liabilities, and the continuing credit union will maintain the MLCU name and brand.
In addition, the memorandum of understanding between FBCFCU and MLCU includes a provision for two of the volunteer board members of the FBCFCU to join the volunteer MLCU board of directors.
The proposed expanded Fort Bragg operation of MLCU would offer current employees of the merging credit unions opportunities to stay and grow – with both branch service and back office positions being maintained in Fort Bragg.
Cooper will be the chief executive officer of the continuing credit union, with Merritt retiring at the conclusion of the merger.
Jill Lydick, the assistant manager of FBCFCU, will be staying on with Mendo Lake in a senior management position as will Tracy McDaniel, MLCU Fort Bragg branch manager.
The location of the Fort Bragg office will be carefully reviewed during the merger exploration process. A branch location will be chosen from the two existing CU locations on Main Street and on Franklin Street and then will be specified in any final agreement.
Officials said this proposed partnership will ensure continued stability and vitality and position the continuing credit union for sustained future growth.
The greater capital resources of the combined organization will continue to provide a high level of local service while maintaining the reserves needed for growth and stability in the years to come, credit union officials said.
For more information, visit www.fbcredit.com or www.mlcu.org .