Trades Press NCUA For Action In Wings-Continental Situation

WASHINGTON—The credit union trades are pushing NCUA to step in on Apple Valley, Minn.-based Wings Financial FCU’s appeal to members of Continental FCU to try to bring the El Segundo, Calif.-based CU’s board back to the merger negotiating table. Suggesting that NCUA has the authority to act in this matter, NAFCU’s Fred Becker said, “[the agency’s] silence would, in fact, be a decision. No action from NCUA is a decision.” Industry insiders have suggested it is imperative for the regulator to carefully consider the precedent that Wings’ actions—described by Continental as a “hostile takeover”—could set, and what that could mean, not only for the cooperative spirit of the movement but even the ultimate safety and soundness of the National Credit Union Share Insurance Fund. “Look at how credit unions and the NCUSIF reacted after Katrina,” one credit union advocate suggested. “They stepped up to the plate. That didn’t happen in the banking industry. It happened among credit unions because we cooperate. The NCUSIF is, in fact, dependent on the cooperative nature of credit unions, and this strikes at the heart of that cooperative spirit.” Though NCUA has clarified that any merger proposal brought before the agency must have the blessing of both credit unions’ boards before the regulator would give its approval (after which, the proposal would be put to a membership vote of the CU whose charter would die), NCUA has not indicated any intention of intervening in Wings’ appeal to Continental’s membership.