Gabriels Community Credit Union takeover by MSUFCU is now official

WEDNESDAY, Jan. 3 — The new year is ringing in the end of an era for Gabriels Community Credit Union.

MSU Federal Credit Union’s acquisition of the small thrift institution headquartered at 1901 E. Michigan Ave. on Lansing’s east side, which was announced Nov. 14, cleared its last regulatory hurdle on Dec. 22, when the National Credit Union Administration signed off on it. The takeover became official on New Year’s Day.

MSUFCU President and CEO April Clobes said today she’s “aiming for a March 1 conversion of their account information to our accounts system.”

That conversion will include new deposit and loan account numbers, a new routing number, and updated debit cards and checkbooks. Until the conversion is finalized, former Gabriels members will continue to be able to use their existing account information, cards and checks. MSUFCU will continue to process Gabriels checks purchased prior to the conversion for a yet undetermined time following that conversion, an MSUFCU employee said.

Gabriels and MSFCU have similar roots, in the sense that they both started small.

Gabriels was started in 1957 as Resurrection Parish Credit Union by a group of parishioners. Later it merged with Lansing Catholic Credit Union and eventually renamed itself Gabriels Community Credit Union. It grew to about 2,700 members and a second branch in Jackson.

MSUFCU was started 20 years earlier, in 1937, by eight Michigan State College faculty and staff members as an employees credit union. It has grown into 350,000-plus members and 24 other branches across Michigan, including 14 in Greater Lansing. MSUFCU, which is the largest university-based credit union in the world, had more than $7.6 billion in assets and 1,300 employees in 2023, while Gabriels had $32 million in assets and fewer than 20 employees between its two branches in Lansing and Jackson.

“It's probably a different scenario than what might be typical, but we were approached to see if we might be interested in doing a friendly merger in early November,” Clobes said. “We don't go seek out acquisitions like this, but in this situation, Gabriels had separated with their CEO and was finding that it was becoming difficult to survive on their own. It was just a matter of happenstance and timing.”

Clobes also cited shifting financial realities faced by local institutions like Gabriels as another reason behind the merger. She said the practice of acquiring smaller credit unions and banks “is current in the industry but has become more prevalent in the last few years.”

“Smaller institutions don't always have the resources to be able to be competitive on products or maintain the strict regulatory requirements that continue to grow in the industry. So, a lot of smaller institutions are seeking merger or acquisition partners as a way to continue to be viable for their customers or their members,” she said.

Already, the logo on the door at Gabriels Lansing branch has been updated to reflect the change. The Jackson location, 1800 N Wisner St, will also be under the MSUFCU umbrella.

“We have almost 5,000 members already in Jackson, and almost 10,000 within a 15-to-20-mile radius of that location. So, for us, this was about providing another point of access to our existing members, and the opportunity to continue to grow,” Clobes said.

The move was just the latest in what turned out to be a busy year for MSUFCU both inside and outside of Michigan. In August, the union announced that it had acquired the Algonquin State Bank and McHenry Savings Bank in northern Illinois, bringing its presence in the state up to 10 branches, including five in Chicago.

“The reason this appealed to us is we had just announced an organic growth move into the city of Chicago, where we have a significant number of existing members as well as potential eligible MSU alums living in that region,” Clobes said. “Those acquisitions help us to be able to take what we're putting in the city and start expanding into the suburbs and bring some assets to the organization while we're still growing.”

The merger with Gabriels is the third regional acquisition by MSUFCU in the last decade. The credit union acquired the Eaton County Education Credit Union in 2013, and in 2016 — just one year after Clobes became CEO — it merged with Brandon Community Credit Union in Clarkston.

As for reaction from Gabriels customers, it was mixed late today.

Mark Snapp said he was hopeful that the transition would be smooth but that he “hasn’t had the time to look into it one way or the other.”

“I saw something that came in the mail, but I didn’t even get the chance to read it yet, so I really don’t know much about it,” he said.

Another member, who asked to be identified only as Michael, said he had “mixed feelings” about the merger, but that he was “cautiously optimistic” about the process.

“I live by Sparrow and I've had an account almost 15 years. I mean, I’m not Catholic and don’t have any personal connection to this place, but I’ve always liked the small town feel and service,” he said. “On the other hand, I did have a problem with a loan here once and I wonder if I would have had the same problem with a bigger credit union. I’m just going to wait and see what happens.”

(This story was updated to correct two mistakes in earlier versions. Because of an editing error, the story earlier misstated the date on which  the National Credit Union Administration approved MSUFCU's acquisition of Gabriels. Due to a reporting error, the story earlier said that checks written prior to the conversion of Gabriels accounts to MSUFCU accounts would be honored. The story has been corrected to say that MSUFCU would continue to honor Gabriels checks for some period after the conversion as a cost savings to its new customers. City Pulse regrets the errors.)