The financially troubled Progressive Teachers Federal Credit Union, founded by black educators and business people, has agreed to merge with another credit union.

“I have mixed emotions,” said James Baldwin, chairman of the Progressive Teachers board. “But you have to get past the emotions and look at the economics.”

Progressive, which is merging with the Chattanooga Area Schools Federal Credit Union, closed on the sale of the building last week.

Charles Key, owner of Key Bonding, located across M.L. King Boulevard from the credit union, said he purchased the building to give himself the option of expanding there in the future.

The building and its land, located at 603 M.L. King Blvd., has been appraised for $111,600, according to Hamilton County government. The Progressive Teachers Federal Credit Union bought it for $21,500 in 1980.

The 70-year-old credit union will close Oct. 29, officials said.

The merger comes months after the credit union’s former manager, Margret Hill Burton, was convicted in July of misappropriating $91,000 from the credit union.

But the bigger problem is a lack of membership growth, Mr. Baldwin said.

“The young black teachers weren’t coming. The loyalty we had with the older teachers wasn’t there,” he said. “When people are not joining, you’re just sitting there accumulating old members, and old members don’t borrow. They save.”

He said the credit union relied on the interest from loans to pay salaries and expenses.

When the Progressive Teachers Credit Union opened in 1937, blacks were limited in the places where they could borrow money, Mr. Baldwin said. People have more options now, he said.

“Facts are facts. I’m not bitter, but for everything there is a season and a time for every purpose,” he said.

Progressive Teachers Credit Union members are going to get a 40 percent bonus on their shares before the merger happens, said Gary Land, president of the Chattanooga Area Schools Federal Credit Union. They also will get reduced rates on capitalized loans, and anyone who is delinquent on loans at Progressive will be brought current, he said.

“That will give them a clean start,” Mr. Land said. “We want to provide them with the highest quality of service that we provide for all of our members.”

Mr. Baldwin is one of 241 Progressive members who voted in August to merge with the schools credit union. All accounts will be transferred to the schools credit union on Nov. 3, he said.

Anne Jones Pierre, manager of the Church Koinonia Federal Credit Union, is among 43 Progressive members who objected to the merger.

“I hate to see an organization that has served the community for over 70 years close,” she said.

Ms. Pierre said the business might have remained open if its leaders had called in someone with financial expertise to restructure their organization.

“You’re talking about an establishment in the community that has shown its ability to weather the storm,” she said.

Progressive Credit Union membership began declining during integration in the late 1960s after black teachers were allowed to join the Chattanooga Area Schools Credit Union, Mr. Baldwin said.

He said he doesn’t know how many members the credit union had at its peak, but current membership is 653. The Chattanooga Area Schools Credit Union, established in 1935, has 9,657 members, according to the National Credit Union Administration.

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