Year after year, the number of credit unions continues to decline. According to NCUA Q3 2025 data, there were 4,331 credit unions nationwide, down from 4,370 in Q2. Mergers remain a primary driver of consolidation, occurring for a variety of reasons including succession challenges, membership expansion, competitive pressures, and increasing technology and compliance demands.
Effective January 1, 2026, the NCUA’s new succession planning rule requires all federally insured credit unions (FISCUs) to maintain a board-approved succession plan for covered positions. These positions include the CEO, board members, senior executives, management, and other roles deemed critical to operations. The intent of the rule is to reduce unplanned mergers driven by leadership gaps, particularly as long-tenured executives retire. Having a defined plan for filling vacancies and preventing attrition in the first place is a good defense against unwanted and unplanned mergers. However, not all mergers are reactive. Many are strategic.
Although the number of credit unions continues to decline, total industry assets are growing. As of Q3 2025, total assets increased by $86 billion. Credit unions with $1 billion or more in assets reported the strongest gains in shares, loans, membership, and net worth. The average credit union now holds approximately $522 million in assets, and projections from the CEO Advisory Group suggest the average could reach $3.4 billion by 2040. Strategic mergers will likely play a significant role in this continued asset growth.
For credit unions considering a voluntary, growth-oriented merger, the first and most important question is: Does this add value for our members?
A merger should enhance the member experience. Consider whether it would:
If the answer is yes, the next step is defining your merger strategy.
Before engaging potential partners, leadership and the board should clearly articulate:
Clarity at this stage prevents misalignment later in the process.
Potential partners are not always publicly seeking mergers. Identifying the right fit may require direct outreach or assistance from firms experienced in credit union mergers and acquisitions.
Initial discussions typically involve the CEOs and boards assessing whether a merger would benefit both memberships. Engaging experienced third-party advisors can help ensure critical questions are addressed objectively. A non-disclosure agreement (NDA) should be executed before sharing confidential information.
Key early discussion points often include:
If alignment exists, the parties can move into formal negotiations and due diligence.
Once both boards agree to proceed, comprehensive due diligence begins. Collaboration with legal counsel and CPA firms is essential.
Areas of review typically include:
Thorough due diligence protects both institutions and ensures there are no unexpected risks.
After completing due diligence and finalizing terms, the merger package must be submitted to the NCUA. The package includes:
The merging credit union’s membership must approve the merger by vote. Members must receive notice at least 45 days, but no more than 90 days, before the vote. Proactive communication prior to the notice is critical, however. Clearly explaining the “why” behind the merger helps members feel informed and increases the likelihood of participation.
Following regulatory and membership approval, the merger may be completed. The board of the continuing credit union must certify completion to the appropriate Regional Director within 30 days of the effective date.
Regulatory approval is not the finish line. Integration requires deliberate planning and execution.
Leadership should:
While no merger is seamless, preparation significantly improves outcomes.
When thoughtfully planned and strategically aligned, mergers can position a credit union for long-term growth, stronger leadership, and enhanced member value.
The key is clarity: understand your “why,” define your must-haves and non-negotiables, conduct thorough due diligence, and communicate transparently and honestly. With the right preparation, a merger can be not just a solution—but an opportunity.
Have questions or want to know more? Email us at compliancesupport@viclarityus.com.
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For more information, email Heather Line.
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