SALT LAKE CITY – Sometimes a merger with a stronger partner, rather than converting to a federal charter, is the answer to future growth for small Utah state-chartered credit unions. At least that's the message being conveyed by the $120 million Utah First Federal Credit Union which announced it is acquiring two small state-chartered CUs whose future earnings and service potential–barring a merger-looked bleak. "We saw this as win-win situation for all concerned," declared Darin Moody, president of Utah First, regarding the nearly complete acquisition of two small state-chartered credit unions – the $15 million Utah Oil Workers CU of Murray and the $4.5 million Postal First CU of Salt Lake. The NCUA has approved both acquisitions with final state clearance expected any day. While each had adequate capital, both CUs had been struggling to keep up with member servicing particularly in the technology area, said Utah First. Neither one had ATM access or home banking, among other services and found the pace of change "challenging." Postal First currently has 1,200 members while Utah Oil has 3,200. Moody noted a merger of the two CUs will provide significant "economies of scale" to all three institutions and will serve "to provide better financial products and services." Though there are no immediate prospects Moody can discuss, Utah Federal will be on the lookout for other small CU candidates for merger. There may be "additional partnership opportunities," he said in a press release, and on that "we will continue to explore these situations." Commenting on the conversion/tax imbroglio in Utah marked on July 15 by an American Bankers Association FOM suit against NCUA, Moody said management of both Postal and Utah Oil did not see a federal charter as a solution for expansion when they were having difficulty meeting member needs. But Moody said all Utah CUs, whether state or federal, remain confident they can defeat the ABA suit and that it is heartening the NCUA "is engaged in protecting the rights of credit unions." The industry in Utah, he said, "is hardly scared" by the latest ABA challenge to FOM policies and their legal action "will not retard" our plans for expansion. He called a fresh media attack on "mega" CUs late last month by Howard Headlee, president of the Utah Bankers Association, as self-defeating. His attacks "remain entertaining and amusing," said Moody suggesting the UBA head suffers a credibility problem in the eyes of the Utah public. [email protected]