In more credit union merger news, it was announced last week that Belvoir Federal Credit Union will be merged into PenFed effective May 1, 2016. Unlike the Montauk/Bethpage merger, this merger wasn’t due to financial problems. The merger was decided by Belvoir’s Board of Directors and approved by a majority of Belvoir members.
According to PenFed’s press release, "PenFed expands its field of membership." However, that’s not really significant since PenFed already makes it easy for anyone to join via an association. Belvoir FCU has also been an "easy-to-join" credit union via an association.
One important impact to Belvoir members is that all Belvoir Federal accounts will be transferred to equivalent PenFed accounts. Not all Belvoir accounts have equivalent PenFed accounts. One example is Belvoir’s reward checking account, called CUXcel Checking. This account will be converted to PenFed’s Access America checking account which isn’t a free reward checking account. Access America checking has a top rate of only 0.50% for balances between $20K and $50K. Also, the account has a monthly fee unless direct deposit of $500 is maintained.
The CUXcel Checking Account used to be a very competitive reward checking account several years ago. The rate is now low for reward checking, but it’s still double the rate of the Access America checking. The top rate is currently 1.01% APY for balances up to $15K if monthly requirements are met. The account is free regardless if the member meets the monthly requirements.
The CUXcel Checking account has long been on the list of nationally available reward checking accounts. That will end with the completion of this merger.
Lastly, this merger and the merger of Montauk into Bethpage continue the trend that has been seen for several years in which larger credit unions grow larger, while many of the smaller credit unions either shrink or disappear altogether. PenFed currently has over $19 billion in assets compared to Belvoir’s assets of $324 million.
Many thanks to DA member, Carpline, for posting on this news in the DA forum.