Credit union merger called off.

Byline: Joe Mosley The Register-Guard

A merger that would have combined two of the three largest credit unions in Oregon was scuttled Friday - at least for the time being - as state regulators waited for credit union officials to resolve questions that had been raised earlier this month.

Gordon Hoerauf, president and chief executive officer of Eugene-based Oregon Community Credit Union, said the parting of ways with Portland Teachers Credit Union is a matter of corporate personality rather than the hitch in regulators' review of the proposal.

"The decision not to move forward was based on differences in operational practices," Hoerauf said. "Our way was better for our members, and their way was better for theirs."

As an example, Hoerauf pointed out that his credit union uses a centralized lending approval process, while the Portland Teachers decentralizes the process by handling it at each of its branches.

Oregon Community Credit Union - formerly U-Lane-O - is the third-largest credit union in the state, with $680 million in assets, seven branches, and more than 82,000 members.

Portland Teachers, the state's largest, serves more than 155,000 members with 10 branches and $1.6 billion in assets.

Through the merger, Oregon Community had hopes to quickly expand its reach in the Portland area, where many members live.

"This has always been about brick-and-mortar access for our members in Portland, at least for us," Hoerauf said Friday. "Overnight, you'd have 10 branches of Oregon Community Credit Union in Portland."

Mary Jane Campbell, senior vice president of sales and marketing for Portland Teachers, echoed Hoerauf's explanation for the change of plans.

"It really was a matter of facing complex operational issues," Campbell said. "We felt we just needed to take a breather."

Members of the Portland Teachers - which would have taken on the Oregon Community Credit Union's name and changed its charter - had been scheduled to vote on the merger June 10. No vote would have been needed for Oregon Community Credit Union members.

The two credit unions announced in March their intention to join forces, and at one point the proposal had been approved by regulators at both the National Credit Union Association and the Oregon Division of Finance and Corporate Securities.

But state officials said that regulators raised new questions late in the merger process. The state declined to disclose those issues to The Register-Guard.

"Both we and NCUA had issued approval on the merger," Steve Corson, spokesman for the Oregon Department of Consumer and Business Services, said earlier this week.

But officials at the Division of Finance and Corporate Securities "do have some more questions," he said. "They have asked for a response."

Corson, reached late Friday, said the credit unions' decision to call off their merger came as a surprise.

Officials from both credit unions stressed that they will continue discussions, and a merger remains a possibility in the future. "We will have brick-and-mortar branches in Portland," said Hoerauf. "And I hope that it's (a shorter time frame) rather than longer."