Regulator Bids For Higher Member PayoutIn Corporate Merger
NASHVILLE, Tenn. - (03/07/06)--The proposed merger between VolunteerCorporate CU and Western Corporate FCU is being questioned by thestate regulator. Bruce Fahnestock, CEO at VolCorp, said the stateregulator has requested that the corporate pay out more to membersfrom reserves and undivided earnings than NCUA will permit, as partof the merger. The merger proposal calls for VolCorp to payapproximately $4 million to natural-person credit unions.Fahnestock said he does not expect the merger will be scuttled, butsimply delayed as the corporate works with the two regulators toarrive at a figure. He noted the Tennessee Department of FinancialInstitutions did not provide a figure for how much more it wouldlike to see returned to current VolCorp-member credit unions.Because VolCorp was formed by the state legislature, there are norules on mergers. instead, VolCorp must demonstrate a 'compellingbenefit' to VolCorp members in order for the state regulator toapprove any deal. 'We¹re trying to find out where each of theregulators are at this time,' Fahnestock told The Credit UnionJournal. 'We would still like to have this done bymid-Summer.'