NCUA Issues M&A Guidebook for Credit Unions

ALEXANDRIA, Va. — NCUA wants to help credit unions navigate the M&A waters.

To that end, last week the agency's Office of Small Credit Union Initiatives (OSCUI) released a brochure — "Truth In Mergers: A Guide for Merging Credit Unions" — to provide a framework for CU managers and directors "to begin discussions about the future direction of a credit union."

"Every strategic plan should include contingencies, including when a merger is worth considering," OSCUI Director William Myers said in a statement. "The critical first step is recognizing the early signs that a credit union's long-term viability may be at risk. A credit union still in sound financial condition has more options when it comes to merger partners and is in a better position to negotiate a contract than a credit union in a deteriorated financial condition."

NCUA said the brochure incorporates lessons learned following the review of more than 430 mergers over an 18-month period, and is designed to help CUs considering mergers recognize when that is in the best interest of the institution and how to negotiate merger contracts that serve employees as well as members.

The 25-page brochure also contains best practices information and historical merger data.