River Valley proposes merger with Barre-based credit union

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BRATTLEBORO — A merger between the River Valley Credit Union and Members Advantage Community Credit Union, headquartered in Barre, will need state regulators' approval as well as a vote of the members of both credit unions.

The merger, which was announced earlier this month, would join "like-sized and like-minded Vermont credit unions," in the words of Jeffrey Morse, the chief executive officer of River Valley, which started its corporate life more than 60 years ago as the Putney Credit Union.

Morse said the merger has many benefits for the 18,585 members at River Valley, which is headquartered in Brattleboro, and would enable the credit union to offer some types of loans it is currently prohibited from offering — and conversely, enable Members Advantage to also expand its loan offerings.

There will be lower fees, he said, and expanded offerings.

Morse said the merger is not prompted by financial difficulties, even in the age of the coronavirus. "We're in great financial shape," he said.

But he said the banking industry faces incredible pressures. He said that in 10 years the credit union would face even greater challenges without the merger with Members Advantage.

A big change will be River Valley's ability to offer business loans, since many of its members are small businesses, but the credit union has been unable to offer such loans, Morse said. "It's great news for River Valley Credit members," he said.

"This partnership will expand and improve our ability to serve the lending needs of our members. By combining credit unions, we will have a larger capacity to lend to our members and we will be adding more loan products," Morse said.

Mike Cooney of Wardsboro, chairman of the board of directors for River Valley, said the merger has the unanimous support of the credit union's directors. He said there is a lot of misinformation about the merger, and wants to stress that he views it as a complete plus for the members of River Valley.

River Valley was created in 1948 when Putney Credit Union merged with the Springfield-based Maple Valley Credit Union, Morse said. Members Advantage, which is slightly smaller in membership than River Valley, was created with the merger of five small credit unions in the Barre area.

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Cooney said he has been chairman of the board for 15 years.

"We'll get better rates, we'll be able to offer business loans and student loans. There's a myriad of things in its favor," he said of the merger.

A public hearing held earlier this week before state regulators produced some questions and concerns about the merger, Cooney said, but those questions were answered during the hearing.

Both Morse and Cooney said there would be no layoffs or closures of River Valley offices, although the corporate address would shift to Barre.

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Morse said he is the only member of the executive team who would be leaving, and he said he has wanted to retire. He said he would remain as a consultant for three years once the merger is approved.

Morse said the merger discussion started between himself and Sean Gammon of Members Advantage a few years ago, and they talked about it more seriously more than a year ago.

Morse said he outlined a potential merger to the credit union's staff just about a year ago, and after discussions spreading over a couple of months, the staff is fully supportive of the plan. The credit union has 61 employees.

One person who has serious reservations about the proposed merger is longtime member Howard Fairman of Putney, who worked in the banking industry in Montreal for decades.

He said he is concerned about the voting process for members to approve the merger, saying all members should have a mailed-in ballot.

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Fairman said he will study the latest financial reports of the credit unions before forming a final opinion.

As of now, Cooney said members will be mailed ballots but would vote electronically, which Fairman said is vulnerable to fraud.

Fairman also said the majority of the directors of the merged credit union would come from Members Advantage (seven out of 13), even though River Valley has more members. Members Advantage has more reserves than River Valley, he said, but that's because River Valley takes its mission as a credit union of loaning members' deposits to other members more seriously.

Morse said there will be four informational meetings about the merger, including at least one in person that will follow safety guidelines.

He said most of the concerns raised during the state hearing came from the Brattleboro area. He said the Members Advantage membership is used to mergers and has been through the process before.

Members Advantage has offices in South Burlington, Barre, White River Junction, Windsor and Springfield.

River Valley has offices in Brattleboro, Putney, Bellows Falls, Springfield and Townshend.

"Brattleboro will continue to be a hub of activity," Morse said.

Contact Susan Smallheer at ssmallheer@reformer.com.


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