Banking

Ex-CEO of Vermont credit union leads opposition to merger

The planned merger of the two largest credit unions headquartered in Vermont has encountered pushback from past leaders.

Vermont State Employees Credit Union in Montpelier last month announced that it agreed to merge with New England Federal Credit Union in Williston. It is the biggest credit union merger announced so far this year and, if approved, would create an institution with more than $3 billion in assets operating under the New England FCU name.

But the plan has already run into a potential roadblock due to opposition from a former CEO and two former directors.

A group led by former VSECU CEO Steven Post has launched a website and penned a letter opposing the move and asking other members to join the cause.

Post joined the credit union as its chief financial officer in 1988 and became CEO in 1990. He retired in 2013.

In an interview, Post said the credit union was “custom made” for the state and its residents, and he fears the deal — and subsequent loss of control of the new board — will result in less local focus than members have grown used to.

“If this merger takes place, VSECU will be lost to Vermonters forever. Frankly, that is something I never foresaw happening when I stepped down,” he said.

Vermont State Employees Credit Union in Montpelier plans to with New England Federal Credit Union in Williston. VSECU’s previous CEO opposes the deal.

Post, who is still a VSECU member, said the membership has always been “democratically engaged,” and he believes many other members will object to the merger too.

New England FCU has $1.9 billion of assets. Vermont State Employees has $1.1 billion of assets. Both are based in Vermont, but Post sees them as very different culturally.

NEFCU has never had the Vermont focus that VSECU has had, according to Post.

“If it had, it might have worked to serve more of Vermont sooner than now,” he said. “It’s not well known, but one of NEFCU’s early expansion moves out of Chittenden County was to merge with a credit union in Detroit, where it still has a branch today.”

Post is joined in his opposition by two former board chairmen, including attorney Jerome Diamond.

Diamond said in a letter that he has been a member of VSECU since 1970 and that the merger would hurt the people of Vermont who are trying to maintain their communities and find ways to build their regional economies.

“This proposed merger guarantees us that VSECU members will never control the identity or purpose of the new institution,” he said in the letter.

Rob Miller, president and CEO of Vermont State Employees, is slated to become president and chief operating officer of the new organization.

He said he was not shocked that there would be some resistance because the membership is very engaged. He has heard from members who have been mainly concerned about how they will be directly impacted. Issues such as ordering new checks and/or direct deposit changes have been brought most often, he said.

“And many of those we simply don’t have answers to yet,” he said.

This is not sour grapes. This is more fundamental and philosophical.

Steven Post, former CEO of Vermont State Employees Credit Union

A “few” members have also expressed concern about the potential loss of the local touch, but Miller said those worries are for naught.

“We’ll be in a better position to thrive and continue to do what we do but as a larger, stronger, more impactful organization,” he said.

VSECU does not want to grow just for the sake of growth, and it will still be small in the overall financial services market, according to Miller.

“JPMoran Chase has recently come into Vermont, so the world has changed quite a bit over the last 10 years,” he said. “And the level of competition we face is completely different than it was even five years ago.”

Miller said he does not believe Post has an ax to grind with his former employer.

“There’s no backstory,” he said. “He left on his own and I was his successor.”

Post said he has no ill will toward the credit union but only wants what he believes is best for it going forward. “This is not sour grapes. This is more fundamental and philosophical,” he said.

A majority vote by members of Vermont State Employees Credit Union is required for the merger to go through. Members will vote on the merger at a special meeting in the fall.



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