The Texas Credit Union Commission has proposed a new rule that would effectively ban hostile credit union takeovers.
The proposal issued for public comment would prohibit a credit union from offering a merger inducement to another credit union's members as a means of promoting a merger of the two credit unions.
The ban was recommended by the Texas Credit Union League, which opposed the $1.6 billion-asset Wings Financial Federal Credit Union's recent hostile takeover attempt of the $178 million-asset Continental Federal Credit Union in El Segundo, Calif.
Wings, of Apple Valley, Minn., had offered to buy Continental. After that offer was rebuffed, Wings took its appeal directly to Continental members, promising to pay them each $200 if they agreed to the offer.
In April, Wings withdrew the offer after the National Credit Union Administration ruled that federal rules prohibit such premerger inducements.
