Xceed Financial Credit Union to Merge with Kinecta Federal Credit Union


Xceed Financial Credit Union located in El Segundo, California announced on Monday that its members approved the proposed merger with Kinecta Federal Credit Union in Manhattan Beach, California.

The $944 million credit union proposed the merger after declining numbers in loans and membership. From 2016 to 2020, the credit union’s membership dropped from 68,115 to 47,590 while its loans dropped from $790 to $559 million during that same four year period. Furthermore, the credit union reported a loss of $2.9 million during 2020, a drastic fall from the $1.9 million income it reported for the previous year.

The merger will make them not only the eight largest credit union in California, but will give the combined credit union an asset size of $6.2 billion and a membership of 280,041.

Theresa Freeborn, Xceed Financial President/CEO and future president of the combined credit union said in a prepared statement: “The economies of scale we achieve open up a whole new world of benefits for members that Xceed simply could not have delivered had we continued to go it alone.”

Heading up the new credit union will be Kinecta President/CEO Keith Sultemeier.

The proposal was approved by the credit union’s members with a vote of 1,536 in favor of the merger to 323 against it. While the majority of voters seemed pleased with the merger, it’s worth noting that these tally to under 2,000 member votes, a small percentage of the credit union’s 47,000 members.

As Chip Filson discussed in his recent article on the low percentage of member voting, if the overwhelming majority of the membership does not participate in the vote, what does that say about the members’ interest and commitment to their credit union?

Filson notes, “Co-op democracy only works if members believe their role matters and they are encouraged to exercise their voice. This is not the process being followed in most mergers. If 90% or more voters failed to participate in any political election, many would consider it a façade. ‘My vote won’t matter so why bother.’ Unfortunately this is the pattern in almost all credit union mergers.”

In this particular case, Xceed Financial held a virtual meeting on February 26 for members to vote on the proposal, however, this could have dissuaded those without the time to sit through a meeting, those who may not have felt they were qualified, or those with busier schedules from voting.

If low voter turnout is a norm for credit unions, perhaps then it’s on them to provide more information on the merger and find ways to get member interested and invested enough to vote, along with lowering the barriers needed to vote. The merging of two credit unions is no small change, and all members should be educated on how it will impact them.

The Xceed Financial and Kinecta FCU merger will go into effect on April 1st, 2021.


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