Credit unions in California primarily serving the educational community should be nervously looking over their shoulders at $15.2 billion SchoolsFirst Federal Credit Union (Santa Ana, CA).
The National Credit Union Administration in the third quarter granted SchoolsFirst FCU a trade-,industry-,and profession-wide (TIP) charter serving the educational community throughout the whole state of California.
Last week, SchoolsFirst announced a merger with $1.9 billion Schools Financial Credit Union (Sacramento, CA). It is likely that this merger was facilitated by the expansion of SchoolsFirst's TIP charter to the whole state.
SchoolsFirst will likely use its TIP charter to prey on the membership of other California-based educational credit unions.
In 2016, SchoolsFirst was accused of trying to poach members from Schools Federal Credit Union (Rancho Dominguez, CA) and thereby threatening the viability of the credit union.
These smaller credit unions serving the educational community are going to have a difficult time competing against SchoolsFirst and will have a hard time remaining independent.
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I wonder is this merger is more about a CEO succession plan than anything else. SFin CEO eventually replacing SFirst CEO. Big payoff down the road for SFin CEO when taking the helm and getting comp package based upon asset size of larger CU.
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