Merger to expand Community Choice's foothold in western Michigan

First General Credit Union in Norton Shores, Mich., plans to merge with Community Choice Credit Union in Farmington Hills, Mich.

The two institutions are headquartered more than three hours apart. Community Choice is based in Metro Detroit and the deal will expand its presence in western Michigan, where it already has branches in Holland and Muskegon.

First General's board concluded that, although the $60 million-asset credit union is financially strong, a merger will provide its members with additional products, services and delivery systems that a credit union of its size cannot offer, according to a notice sent to the membership.

For example, the $1.4 billion-asset Community Choice offers commercial loans and commercial business services, which can support the needs of small businesses. Additionally, Community Choice gives an annual patronage dividend to its members through a rewards program. Since 2013, Community Choice members have received $14.6 million.

"The costs of compliance, technology and security of our members’ personal information challenges credit unions of our size. These increased costs make it difficult for our credit union to provide competitive wages and benefits to our employees while being able to offer the products and services that our members want and need," First General said in the notice.

As part of the merger, Community Choice has agreed to build a full-service branch on property owned by First General.

All First General employees are expected to be retained by Community Choice. The credit union’s five highest-earning employees will also receive raises or severance, for any who choose to leave, ranging from about $5,000 to nearly $70,000.

First General earned roughly $34,000 in the first three quarters of 2020, compared with a loss of $415,000 for the same period in the prior year, according to National Credit Union Administration call report data.

Community Choice earned roughly $5.8 million in the first three quarters of 2020, compared with $5.6 million for the same period in the prior year, according to NCUA data.

A member vote is expected to take place in April.

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