Industry Shake-Up as Many Small CU’s Merge for Survival or Scale

The credit union landscape is rapidly changing, and 2024 was a banner year for mergers. The NCUA approved 162 consolidations in 2024, a jump from 145 the year prior. While some mergers were strategic (26 deals driven by the desire to expand services and reach), many were born of necessity.

Six credit unions that merged were in poor financial condition – in fact, two had lost millions in recent years, making survival on their own untenable. Other reasons cited included inability to find new leadership, dwindling fields of membership, or sponsor organizations disappearing.

Notably, a few large combinations grabbed headlines: in California, the $559 million LA Financial Federal Credit Union merged into the $2.8 billion Credit Union of Southern California, exemplifying how even mid-sized institutions sought partners for strength.

For collections managers, consolidation can bring both challenges and opportunities. Mergers can mean inheriting a new portfolio of loans (with its delinquency quirks) and integrating two collections departments into one. During 2024’s merger wave, best practices emerged: proactively aligning policies, consolidating collections software, and cross-training staff to handle increased volume.

On the flip side, merged credit unions often achieved greater efficiency and could invest more in advanced collections tools post-merger.

Takeaway: The trend of fewer, larger credit unions marched on in 2024. Collections professionals should be prepared for merger impacts – from culture shifts to data migrations – as the industry continues to streamline for competitive viability.