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Reinvention Through Merger

two business men holding two parts of a key that they want to fit together
James Lenz Photo
Professional Development Manager
CUES

3 minutes

In the CUES Podcast episode 56, learn how 4Front Credit Union was created from the merger of two solid credit unions.

The most recent episode of the CUES Podcast discusses a unique merger with the leaders of $488 million 4Front Credit Union, Traverse City, Mich. 

Many times credit unions merge because of shrinking membership, loss of management or regulatory pressure. Seldom do you see two organizations combine when there is no catalyst other than two boards coming together for the betterment of their organizations. But that is what happened in this case. 

4Front Credit Union is the result of two strong, successful credit unions—Bay Winds Federal Credit Union and Members Credit Union—realizing that they could be even better together! On Jan. 2, 2015, CUES member Andy Kempf became president of the new credit union and CUES member David Leusink became CEO. In addition, the two boards merged to form an 18-person board, with the goal of reducing by attrition down to a nine-member board.

In the podcast, David and Andy tell the story of how the two institutions can come together to provide enhanced value and service to members, career opportunities for their co-workers, and economic strength to their communities. These experiences helped cement their strong belief that credit union mergers need not result in winners and losers, but should instead present opportunities for institutions to reinvent themselves and deliver the very best credit union possible.

“Be humble when you are going through this process,” says Kempf. When looking at how your credit union works, ask yourself, “Why are we doing this? Is it just a legacy policy, procedure (or) service that we’re doing, or is it something that is really in the best interest of not only the members but staff? How can we make this more simple?”

 “For me it was really identifying what the core values were for the organization, those things that you thought were the bedrock for our success,” adds Leusink. “And then being prepared to put everything else on the table for discussion.

“We went through every process we had and took a step back from what we used to do to what we’d like to do [to] find the best practice model” for what was is in the best interest of the members, he adds. 

Finally, “We both learned: Dream big,” says Kempf. The great scales of economy of the larger CU allowed the merged organization to dream bigger than either of the separate institutions were able to.

Some highlights from my interview include:

a)     How market pressures led two credit unions to become one;

b)     What the two credit union leaders identified as deal-breakers;

c)      How two boards were successfully fused into one; and 

d)     How key leadership positions for the executive management team and the board were selected.

Listen to my interview with the 4Front CU leaders.

The CUES Podcast is an audio program hosted by James Lenz, CUES professional development manager. James talks to credit union and cross-industry experts for their perspectives on trends and topics that matter to you.

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