WASHINGTON-On the heels of NAFCU'S letter to NCUA regarding concerns over the regulator's process for managing assisted mergers, CUNA has announced it has formed a working group to examine NCUA's merger practices.
Credit unions have raised red flags about the regulatory process for voluntary and involuntary mergers, according to CUNA and NAFCU (Credit Union Journal, Jan. 24). CUNA stated that its new merger working group will examine those issues and develop recommendations for improvements to NCUA's process. The working group will be drawn from CUNA's Examination and Supervision Subcommittee. Paul Mercer, president of the Ohio CU League, has been named chairman of the working group.
Early in January, in a letter to NCUA Chairman Deborah Matz, NAFCU President Fred Becker stated that there is "still considerable confusion and frustration with the process that NCUA employs to find suitable merger partners," and called for NCUA to "clarify its selection criteria to match troubled credit unions with potential merger partners" and to "cast a wide net for suitable partners."
Mary Dunn, CUNA SVP and deputy general counsel, said that CUNA has similar concerns. "It's really about not understanding why and how merger partners are selected, and how a credit union even knows a merger is in the works. All of those issues are thorny because NCUA has, and appropriately so, a duty to make sure it preserves the resources of any credit union seeking a merger. If it publicizes to world that a credit union is thinking about a merger, it could create problems for the credit union. It's a delicate balance, but we do think that any process can be improved. And in talking to NCUA, NCUA also thinks improvements can be made."
The four final members of the working group had not been named at press time. The team intends not only to examine NCUA's process, but to also talk with credit unions that have gone through it. "Learn what their concerns are, what they felt went well, and then make solid recommendations for improvement to NCUA," Dunn said.
Dunn expects a timetable for delivering recommendations will be announced soon, but she said the team will be ready to move quickly if NCUA asks for recommendations ahead of the group's schedule.
Dunn shared that NCUA's merger process has been on its "radar screen for some time. We had been thinking about assembling a working group, and moving into the new year we thought it was time to get going."
CUNA also announced last week that it has formed a working group to look at NCUA's proposals to alter charter application and field of membership expansion rules for community federal credit unions. Staffing that team are Frederick Healey, CEO, Workers CU, Fitchburg, Mass.; Carrie Birkhofer, CEO, Bay FCU, Capitola, Calif.; Roger Heacock, CEO, Black Hills FCU, Rapid City, S.D.; Marcus Schaefer, CEO, Truliant FCU, Winston-Salem, N.C.; Gary Clark, CEO, Missoula FCU, Montana; and John Murphy, president, Maine League.
