Corporate Restructuring Yet To Take Off
WASHINGTON – Despite public announcements of three corporate credit union mergers, NCUA said yesterday it has yet to receive applications for any corporate combinations, with a March 31 deadline for every corporate to submit a business plan approaching.
“We’ve had no formal merger applications yet,” Scott Hunt, director of NCUA’s Office of Corporate CUs, said during a panel discussion at CUNA’s Government Affairs Conference yesterday.
NCUA is leaving open the possibility of a merger between WesCorp FCU and Members United Corporate FCU into a nationwide giant, but only after the two failed “bridge” corporates have recapitalized and are re-chartered, Hunt said.
Three pending corporate mergers have been publicly announced: Mid-Atlantic Corporate FCU with Virginia Corporate CU; Corporate America CU with Louisiana Corporate CU; and, Southwest Corporate Bridge FCU into Georgia Corporate FCU, but Hunt said the paperwork has yet to be submitted to NCUA. Several other corporate mergers are believed to be in the works as well.
NCUA told leaders of WesCorp Bridge the regulator would not approve a merger with Members United Bridge, both of which are being run under NCUA conservatorship, because NCUA does not want to be in the position of engineering a corporate restructuring, Hunt said. NCUA also has concerns that such a far-reaching corporate, which could attract as many as 3,000 members across the country, could create too big of a systemic risk such a big corporate would pose, he said.
“NCUA is not in the position of creating or facilitating the corporate system,” he stated.
The NCUA Board is expected to vote as early as next month, according to Hunt, on a rule that would limit natural person credit unions to one corporate and would extend the corporate assessments to non-federally insured corporate members, including privately insured credit unions, CUSOs and leagues. He declined to say whether his office will recommend that the Board adopt those proposals.