A planned union between California Coast Credit Union and San Diego County Credit Union, announced as a transformative consolidation, is now stalled by a Superior Court lawsuit challenging the deal’s termination and raising questions about its future.

California Coast Credit Union and San Diego County Credit Union, two of San Diego’s largest member-owned financial institutions, set out last year to create one of the biggest credit unions in California.

Now, less than a year later, that ambition is entangled in a legal dispute that threatens to derail the deal altogether, various media outlets are reporting.

The planned merger, announced in April 2025, was pitched as a transformative combination that would produce a Southern California credit union with more than $13 billion in assets. California Coast Credit Union, which has $3.4 billion in assets and 208,804 members, and San Diego County Credit Union, with $9.3 billion in assets and 413,370 members, said the unified organization would operate under the California Coast name.

If it makes it to the finish line, the organization will become the 16th largest credit union in the U.S.

Todd Lane, the chief executive of California Coast, was slated to lead the combined institution, while Teresa Campbell, the longtime chief executive of San Diego County Credit Union, was expected to retire at the time of the legal merger.

At the time of the announcement, the institutions projected a legal close in early 2026, with systems integration stretching into 2027, subject to regulatory approvals and a vote of California Coast members.

Instead, the deal has moved from boardrooms to the courtroom.

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A lawsuit filed in Superior Court is challenging the attempted termination of the merger agreement, effectively freezing progress as the dispute plays out. Local and industry reports describe the case as a fight over whether one of the parties had the right to walk away from the deal and under what conditions.

Claims in the case reportedly touch on governance and leadership demands, with the plaintiffs seeking enforcement of the agreement as well as damages.

Despite the legal conflict, public records show that the transaction had already advanced well into the regulatory process. California’s Department of Financial Protection and Innovation listed a merger filing on May 23, 2025, describing a surviving credit union that would change its name to California Coast Credit Union. Both institutions continue to maintain merger-information pages outlining the intended structure of the deal and the approval process, though the lawsuit now casts doubt on the timeline and even the feasibility of completing the merger as originally envisioned.

The stakes are significant. San Diego County Credit Union earned $60.6 million in the first three quarters of 2025, while California Coast reported earnings of more than $21 million over the same period. A successful merger would create one of the most powerful cooperative financial institutions in the state.

The dispute also comes amid a broader wave of consolidation in the credit union industry.

In October, Digital Federal Credit Union and First Tech Federal Credit Union received regulatory approval from the National Credit Union Administration for what is believed to be the largest credit union merger ever proposed in the United States, paving the way for a nearly $30 billion institution serving close to two million members.

Whether the California Coast–San Diego County deal can overcome its legal hurdles remains uncertain, underscoring how even well-advanced credit union mergers can unravel under the weight of governance disputes and competing visions for the future.