Vermont Mountains - Hero

Merging to Improve Our Impact on Vermonters

VSECU and New England Federal Credit Union (NEFCU) are proposing to merge into one credit union to better serve our members and Vermonters, pending approval from regulators and VSECU members later this fall. As two member-owned, not-for-profit financial cooperatives that have been serving Vermonters for over 135 years combined, we believe that together, we will be better and can do more to improve the quality of life for our members, employees, and communities.

For now, it is business as usual. We will continue to engage with our members throughout this months-long process and share information so you can make an informed decision when it is time for the Special Meeting and member vote.

The WHY behind the proposed merger

BETTER TOGETHER: We are building a stronger co-op

Both VSECU and NEFCU have a long history of Vermonters helping Vermonters by joining and participating in our credit unions. When more members come together to save, we have more deposits to fund loans. The interest income generated from those loans is used to pay savers through dividends and savings rates. The more members who pool their resources together in our financial cooperative, the better we can recirculate wealth and the stronger we are for the benefit of each other.

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TRUE TO VERMONT: We are keeping banking local in Vermont

Combining our resources will help protect and preserve our Vermont-based cooperative movement and accelerate financial inclusion for more Vermonters. Together, VSECU and NEFCU can provide the same level of service as the growing number of outside competitors, big banks, and financial technology companies that are winning over some of our members and exporting our Vermont dollars and decisions out of state.

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LEADING FROM THE FUTURE: We are investing in our future generations

As part of our mission to serve all Vermonters, we need to focus not just on the present, but look five, 10, and 20 years ahead with foresight and visionary leadership. We have a vibrant membership and, in this uncertain and rapidly changing world, need to secure our collective financial strength and sustainability to ensure we can serve our members for the unforeseeable future. We are building on a legacy to make sure your children and grandchildren will enjoy the benefits of banking with a financial co-op, while keeping people and families connected, here in Vermont.

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ENRICHING QUALITY OF LIFE: We will be the very best for our members

Together, we will realize scale and capacity that will fuel our ability to do more than we would be able to do on our own. We strive for excellence, listen to member feedback, and know where we fall short of providing exceptional customer service and helping our members achieve financial independence. Increased capital, additional employees, and a more diverse membership, product suite, and balance sheet, will allow us to invest in you with great rates, low fees, more branches, better digital capabilities, and better and more responsive customer service.

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Read more about how the proposed merger will benefit our members:

The goal is to expand access to more products and services and adopt the best-priced products and services from each credit union where possible. As one example, the proposed merger would allow us to reduce overdraft fees from $28 to $14, which is NEFCU’s current fee structure.

Our members would immediately have access to eight more branches around the state, without the cost of construction or leasing space and shoring up financial resources for potential future branches in other areas.

This ever-growing threat requires more and more resources to ensure our members’ information is protected. Blending resources will provide greater investments in security and protect our members’ information.

With the labor shortage, the proposed merger would give us 460 employees and increase our capacity to provide more individual attention to our members’ banking needs.

We would continue to provide our existing and unique services such as green lending and expand new services offered by NEFCU such as their robust and various mortgage products.

We would have access to an additional $113 million available in business lending capacity to support small Vermont businesses and our local economy.

We would be able to make the substantial and consistent investments needed to improve our digital banking services and stay ahead of member expectations for a seamless and safe online and app experience.

Amid Vermont’s competitive and evolving banking landscape, the proposed merger would help ensure that we remain locally operated and able to serve current and future generations of Vermonters.

Watch both CEOs answer questions about the proposed merger

VSECU CEO Rob Miller and NEFCU CEO John Dwyer sat down at the end of April to answer our members’ most common questions about the proposed merger. Watch the hour-long conversation to learn about many different topics related to the merger, such as our parallel histories as Vermont-based credit unions (4:18), benefits for members (20:04), why bigger IS better in a cooperative (42:45), and how the balanced leadership team isn’t receiving any special compensation (59:42). You can also read an open letter from VSECU Board Chair Spencer Newman that was published in VT Digger on April 12.

Upcoming member forums

We’re hosting a series of forums for members to learn more about the proposed merger with NEFCU. This is a great opportunity for our membership to share their questions and thoughts with VSECU Board Members and senior leaders.

During the month of May, we will hold forums in Montpelier, Rutland, and St. Johnsbury. We will update this page and send members information about their nearest forum as we confirm event details. We also hope to schedule more forums in June near other VSECU branch locations as well as virtually. We look forward to speaking with our members and answering all your questions as best we can!

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When: Tuesday, May 10, at 6:00 PM

Where: Vermont College of Fine Arts (36 College Street, Montpelier, VT 05602)
Follow signs to the gallery space in College Hall.

When: Wednesday, May 25, at 6:00 PM

Where: TBD

When: Wednesday, May 25, at 6:00 PM

Where: TBD

Member questions and answers

Since the proposed merger was announced, we’ve collected a range of questions from our members. While many details are still undetermined, here are the answers we can provide at this stage in the process.

We weighed our options

The board has been engaged in various sustainable growth discussions and scenarios over the past few years so that VSECU can continue to remain relevant for today and the future. Potential mergers have been part of those discussions, which informed their analysis of this opportunity. After a series of strategic information meetings throughout 2021, followed by a formal two-day strategic retreat, an exploratory conversation between CEOs Robert Miller and John Dwyer began in October of 2021.

Yes. Guided by their fiduciary responsibility to do what is in the best interest of members, the VSECU Board of Directors engaged in extensive conversations, meetings, and presentations with industry experts, legal counsel, and independent consultants.

This decision was not made quickly. The decision to merge with another entity has been a consideration for several years. When this opportunity arose, we were well prepared to undergo a thoughtful process to move forward. There were many meetings, discussions, exchanges of information, and due diligence between our organizations and respective boards, including outside of the regular cadence of board meetings. It became clear in February 2022 that a proposed merger would have a direct benefit on our members.

While size is not the objective, growth and scale are useful. They help provide access to more capital, mitigate balance sheet risk, ensure financial sustainability, and provide the resources required to invest in the products and services that members want. Increased resources enable VSECU to compete with national banks and financial technology companies in an increasingly complex marketplace.

With minimal growth in population, Vermont is aging faster than any other state. Our average member is 52 years of age and focused on saving, with 44% over the age 55 and 25% ages 40 to 54. This imbalance is not good for savers or borrowers in our membership. We need more young members who are in their borrowing years to keep our financial cooperative working for every generation.

The financial marketplace has evolved at an extreme pace in just the last five years. Consumer demand for both in-person branch connection and the latest mobile technologies require significant investments. To capitalize on this trend, big technology companies are partnering with large national banks or financial service providers, investing billions of dollars to deliver products and services from outside Vermont. This competition, combined with an aging and declining population, makes it difficult for smaller banks and credit unions to compete and maintain market share in Vermont. As a result, our annualized member growth has slowed and declined in recent years.

Yes! Pending approval, the VSECU that you know and love will continue to be visible in many ways as we blend the best of our two organizations.

  1. After the close of the merge, we will continue to operate and serve our members under the VSECU name and brand as a division of New England Federal Credit Union, until a determination is made about unifying under one combined identity and name.
  2. We will retain all our employees and maintain all our branch and office locations as part of the merger.
  3. The leadership will be a balanced reflection of both organizations, both at the Board level and on the senior leadership team.
  4. Our green loan products and focus on sustainable banking won’t go anywhere—this strength of ours will be accelerated through complementary products and services provided by NEFCU.
  5. Both NEFCU and VSECU are committed to honoring our long histories as local cooperatives, reflecting our shared Vermont values, and furthering our common mission to empower a better quality of life for our members.

Both Boards jointly committed to evaluate rebranding under a new name as a merged entity. This evaluation will be supported by critical analysis, branding experts, and member feedback, to name a few considerations. We believed that a disciplined process was essential for such an important decision. We’ve started the process and hope to make a determination before VSECU members vote on a merger, allowing them to factor it into their decision. If we do move forward with a new name for our combined credit union, we don’t foresee this being generated until after the merger.

Over the years, the VSECU Board of Directors has explored many strategic initiatives to ensure our sustainable growth for the future. They have discussed opening new branches, joining or forming a credit union service organization (CUSO), expanding outside of Vermont, and potential mergers with both in- and out-of-state credit unions.

This is good for members

  • MORE FAVORABLE RATES AND FEES
    The goal is to expand access to more products and services and adopt the best-priced products and services from each credit union where possible. As one example, the proposed merger would allow us to reduce overdraft fees from $28 to $14, which is NEFCU’s current fee structure.
  • GREATER CONVENIENCE
    Our members would immediately have access to eight more branches around the state, without the cost of construction or leasing space and shoring up financial resources for potential future branches in other areas.
  • CYBERSECURITY PROTECTION
    This ever-growing threat requires more and more resources to ensure our members’ information is protected. Blending resources will provide greater investments in security and protect our members’ information.
  • PERSONALIZED SERVICE
    With the labor shortage, the proposed merger would give us 460 employees and increase our capacity to provide more individual attention to our members’ banking needs.
  • NEW (AND FAMILIAR) PRODUCTS AND SERVICES
    We would continue to provide our existing and unique services such as green lending and expand new services offered by NEFCU such as their robust and various mortgage products.
  • MORE SMALL BUSINESS LENDING
    We would have access to an additional $113 million available in business lending capacity to support small Vermont businesses and our local economy.
  • IMPROVED TECHNOLOGY
    We would be able to make the substantial and consistent investments needed to improve our digital banking services and stay ahead of member expectations for a seamless and safe online and app experience.
  • SUSTAINABLE GROWTH
    Amid Vermont’s competitive and evolving banking landscape, the proposed merger would help ensure that we remain locally operated and able to serve current and future generations of Vermonters.

We will remain locally operated and keep our resources concentrated in our communities. The strength from within will allow us to expand and reach more people and underserved communities such as the BIPOC, refugee, low-to-moderate income, and rural communities. Our philanthropic focus is aligned so that we can create more impact to address affordable housing, food scarcity, heat, environmental stewardship, and financial wellness.

While other mergers in Vermont may not be viewed positively by many, the proposed merger with NEFCU would be an exception. It reflects two strong Vermont businesses coming together to strengthen their legacies of improving the lives of all Vermonters, now and for generations to come.

Just like VSECU, NEFCU is a member-owned financial cooperative. They share, almost verbatim, our mission to empower members’ financial success and improve the quality of life for Vermonters and have been doing so for more than 60 years. Approximately 84% of their 95,000 members have a Vermont address, which is very similar to VSECU (88%).

Just as VSECU supports Vermonters’ essential needs, NEFCU focuses its community impact in the areas of children’s welfare, nursing and science education, financial literacy, and housing, where they recently committed $6 million to help address Vermont’s affordable housing crisis.

It was non-negotiable for VSECU and NEFCU that all employees would keep their jobs and current salaries as part of the proposed merger. In fact, we foresee the creation of new jobs as part of our commitment to the communities and branch market areas that we currently serve.

No. There are no special, merger-related financial arrangements for the CEO or executives. Like all employees at VSECU, they will maintain their current salary and benefits. With VSECU’s strong financial performance and consistent ranking among Vermont’s Best Places to Work, the Board of Directors wanted Miller as President and Chief Operating Officer to help lead the merged credit union alongside NEFCU CEO John Dwyer.

Ultimately, our members will vote and decide

No. VSECU members will decide the outcome by voting on the proposed merger with NEFCU.  This vote is contingent on regulatory approval by the National Credit Union Administration (NCUA), which can take months.

We anticipate a Special Meeting will be noticed to our members in the fall of 2022. Following that, an affirmative majority vote by the members of VSECU is required.

This is the first step of a lengthy process. We are working to make sure that our members are receiving accurate and updated information to be able to make an informed decision when it comes time to vote.

Pending regulatory approval, we will notify all VSECU members by USPS mail and email of the special meeting. We anticipate this will happen sometime early fall.

The proposed merger would be approved by a majority vote of those members who cast a ballot.

Yes! Like our Annual Elections, eligible members will receive voting instructions with the option to cast their vote online or mail in their paper ballot.

VSECU would continue to pursue its mission and vision to help all Vermonters live more prosperous lives—the same pursuit that led us to enter the proposed merger agreement with NEFCU.

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Questions?

We will continue to update this page as we have more information. If you have any further questions or comments, please email [email protected] or call 802-371-5134, and we will respond to your inquiry as soon as possible.

Email the merger response teamOr call us at 802-371-5134