Lawrence, Methuen credit unions to merge

By Bill Kirk
Business Editor

July 13, 2008 05:37 am

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LAWRENCE — The Lawrence Firefighters Federal Credit Union is merging with the NESC Federal Credit Union of Methuen, according to the chief executives of both institutions.

The move, which was prompted by the Lawrence Firefighters Credit Union losing $1.9 million last year, affects 12,000 members throughout the Merrimack Valley, said Alan Jenne, CEO of the Lawrence organization.

"This will be a very good fit," said Elaine Sullivan, CEO of the NESC Federal Credit Union. "This is a very good business decision."

Jenne said the 58-year-old Lawrence Firefighters Credit Union, which has 7,500 members consisting of federal, state and municipal employees who work in Lawrence, as well as 20 other companies or groups, started losing money in 2006 after portfolio managers there got involved in an "indirect auto loan program" that turned into a disaster.

"We suffered significant losses caused by members who were brought in on the indirect auto loan program," he said. "The underwriting of those loans was not too good, and the credit union lost $1.9 million last year. That, and the way the economy was going, we felt it was better to go find a partner than be forced to find a partner. This is voluntary. If you continue to lose money, the NCUA (National Credit Union Association) would have forced it."

Jenne said he contacted Sullivan earlier this year.

"We started talking about a merger at that point," he said. "The regulators are urging us to go forward with the merger. It takes the pressure off of everybody."

As a result of the merger, the name of the Lawrence Firefighters Credit Union "goes away," Jenne said, adding, however, that the office at 14 Amesbury St. in Lawrence will be named the Lawrence Firefighters Branch of the NESC Federal Credit Union.

Sullivan, whose 50-year-old credit union has 5,000 members made up mostly of IRS employees who work in Andover, Lawrence, Methuen, Fitchburg and Stoneham, said it "will be challenging" to overcome the losses incurred by the Lawrence Firefighters Credit Union, but she is optimistic about the future.

"We have plans to bring forward new products" for members, she said, adding that combined, the new credit union will have assets of $80 million.

Last week, a letter announcing the merger was sent out to all of the members. It was also posted on both banks' Web sites.

Lawrence Firefighters Federal Credit Union staff and management will be retained, and representation from its board of directors will be present on the NESC board of directors, Jenne and Sullivan said.

Sullivan, with more than 35 years experience in the credit union industry, will remain in her role following the completion of the merger. Jenne, who has more than 30 years of banking and credit union experience, will assume the role of executive vice president and chief operating officer.

"This merger presents many opportunities for the membership of both credit unions and will have a positive impact on the local financial services industry," Sullivan said. "I look forward to working with the Lawrence Firefighters' management team and staff as we maintain current services and also initiate new programs."

Once the merger is approved and completed, members will have three locations at which to conduct transactions — 14 Amesbury St., Lawrence; 248 Pleasant St., Methuen; and 310 Lowell St., Andover. There will also be a network of seven local ATMs.

The proposed merger is pending NCUA approval and a vote from the general membership of Lawrence Firefighters Federal Credit Union. The merger is expected to be completed by the end of 2008. The board of directors of the Lawrence Firefighters Federal Credit Union has already voted to approve the merger.