ALEXANDRIA, Va. – NAFCU yesterday called on NCUA to open its assisted merger process so that more credit unions can participate in the bidding for ailing credit unions.
"While NAFCU understands that NCUA must in many cases act quickly to find a suitable merger partner for a troubled credit union in order to protect the share insurance fund, many of our members have expressed dissatisfaction with some of the mergers that have resulted over the past year," NAFCU President Fred Becker told NCUA Chairman Deborah Matz in a letter yesterday.
Becker said NAFCU is concerned by NCUA’s preference that troubled credit unions shopped to only the biggest and best-capitalized credit unions may preclude other healthy credit unions from participating in the process and preventing some deals that may be better for NCUA and the National CU Share Insurance Fund, which has paid out tens of millions of dollars to facilitate assisted mergers over the past three years.
NAFCU is encouraging its members to contact all NCUA regional directors regarding their availability to merge with all or part of another credit union; however, NAFCU also believes the agency should make this known in a formal communication to all credit unions. "NAFCU obviously understands that the agency needs flexibility in the current economic environment," Becker added. "However, one consequence of the lack of standardized agency procedures is that many credit unions are being left out of fair and equitable consideration."
"We also understand the need to keep certain issues confidential. Nonetheless, we believe there is a middle ground that can be reached where important issues may be kept confidential while still providing prospective merger partners more information regarding the selection process," Becker wrote. "We believe potential partners should have an opportunity to provide a final, written statement outlining their case for the merger. At the very least, the agency should provide some sort of written explanation detailing the primary reasons for its decision.
The letter also was sent to NCUA’s other two Board members, Gigi Hyland and Michael Fryzel.
