This commentary is by Spencer Newman of Burlington, chair of the VSECU board of directors.
Our state takes pride in the values of independence and community, where Vermonters help Vermonters overcome barriers and achieve fulfillment. This people-helping-people concept for the benefit of individual success embodies and aligns with the values of a credit union and cooperative principles. The more people come together, the stronger we all become.
VSECU is a credit union for everybody in Vermont. And we are excited to share our board of directors has unanimously, and enthusiastically, approved a proposal to unify and merge with another Vermont financial cooperative that has been serving Vermonters for 61 years, New England Federal Credit Union.
Combining our capital, talent and knowledge will create scale and greater social and economic value for our members and the real Vermont economy.
Like VSECU, originally created to serve the employees of the Vermont state government, NEFCU was created to serve employees of IBM, located in Essex, Vermont. Both have a rich history that has evolved since inception to better serve members and ensure relevancy for the unforeseeable future.
Both organizations’ logos, business approach, leadership and membership base have changed with time, but one thing has remained constant — creation of value for their members.
Change is inevitable, in life and in business. The financial services landscape has changed drastically in the last decade. Out-of-state banks are entering Vermont and extracting our local dollars into a national financial system and moving decision-making out of Vermont. Financial tech companies are changing the face of the banking industry, such as Square, Venmo, Acorns, Paypal, Chime, and even Apple, Google and Amazon.
Consumers want more relevant, personalized, faster and better engagement, with products and services both in person at branches and online.
The time is ripe to lean into our cooperative principles and business model with foresight and strategic leadership to ensure Vermont’s independence in the financial system and financial inclusion for all Vermonters.
This partnership between VSECU and NEFCU reflects something to celebrate. It is a strengthening from within Vermont for Vermont. Our memberships will join and become 160,000 strong, most of whom are our neighbors, families and community members in Vermont, keeping our dollars local and lifting each other up to experience financial security and independence. We are stronger together. This is the Vermont way.
Cooperatives thrive when more members participate. It’s no secret that we live in one of the most aging states with zero to low population growth. Combined, we will expand our generational membership, which is critical to balance equity and affordability between savers and borrowers.
Affordable housing in Vermont is a challenge. Combining our mortgage operations, more members will have access to first-time home buyer, VA and VHFA mortgages, helping younger people and more families stay connected and in Vermont with the dream of home ownership.
VSECU has been the lifeblood of many new and existing small businesses in the state. Credit unions are limited to a statutory cap of 12.25% of their assets on business lending. Combining our assets will add an additional $113 million available for us to make small business loans in Vermont and support local economies.
We are most excited about our commitment to the landscape and environmental preservation of Vermont. VSECU is a leader in green energy financing and NEFCU a leader in mortgage financing. Folding these two areas of expertise into one experience will help more Vermonters attain affordable and environmentally conscientious homes and support Vermont with its net zero energy goals.
Our branch network will expand, adding eight additional locations without spending a dime on leasing or developing branches. This will benefit the 13,000 VSECU members who live in Chittenden and Franklin counties, our second-largest member population. And it shores up financial resources for potential future branch locations in more rural and underserved areas.
These are just some examples how this intentional partnership strengthens us all.
As we wait for regulatory approval to bring the proposal to our membership for a vote later this fall, we plan to communicate and engage directly with our members throughout this journey. We are confident that our members will see the value and benefit of this proposed merger.
For our 70,000-plus members, we thank you for your trust, confidence, patronage, and your kindness during these past two years as we all navigated through the stress of a pandemic and labor shortage. Thank you for being a member and supporting our cooperative values.
