The National Credit Union Administration has told the $1.6 billion-asset Wings Financial Federal Credit Union of Apple Valley, Minn., that its plan to pay members of a credit union it wants to buy violates the Federal Credit Union Act.
On March 20 directors of the $178 million-asset Continental Federal Credit Union in El Segundo, Calif., unanimously rejected Wings' unsolicited takeover offer. The rejection was the board's fourth of a Wings offer in the last 18 months.
Since then Wings has taken its appeal directly to Continental's members, promising to pay them $200 each if they consent to Wings' offer to buy Continental.
But on Tuesday the NCUA said that such a payment would not be permitted under the federal law, and that the regulator "has requested that Wings FCU discontinue the activity in question."
Wings officials did not return calls by press time.
