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Cornerstone Pushes for Substantive Changes to NCUA Mergers Proposal
Wednesday, August 9, 2017 7:00 AM

Member credit unions have expressed concerns that the NCUA merger proposal increases regulatory burdens without a justified reason, Cornerstone Credit Union League told the National Credit Union Administration in a comment letter filed Monday. NCUA’s proposed rule would alter the procedures a federal credit union must follow to voluntarily merge with another credit union.

"Cornerstone supports a regulatory environment that permits voluntary mergers when a credit union’s board and members determine that doing so is in their best interest," wrote Cornerstone SVP Regulatory Compliance Counsel Suzanne Yashewski. "The rules need to remain flexible, as every merger situation is unique. Any future changes should ease regulatory burdens rather than imposing additional hurdles and complications to the process."

Yashewski also specifically addressed the definition of a "covered person," merger-related financial arrangements and the trigger for disclosure, member-to-member communication, membership approval of a proposal to merge, and the rule's application to state-chartered credit unions.

"Member rights at state-chartered credit unions should be protected by state laws and state regulators, rather than NCUA," Yashewski said. "When a state-chartered credit union merges with a state-chartered credit union, the only concern NCUA should have is for the insurance fund."

Credit Union National Association filed a similar comment letter with the agency. Specifically, CUNA does not support:

  • Additional disclosures, which CUNA believes do little to help credit union members decide whether to approve a merger and could slow or stop the process;
  • Merger notice periods that do not line up with current other NCUA regulations; and 
  • The 15-day, advance member-to-member communication requirement, which CUNA feels is overly burdensome.

“CUNA agrees that members of a merging credit union should be given enough information to make an informed decision,” the CUNA letter reads. “The amount and type of information required to be disclosed can aid credit union members in making the proper decision; however, over disclosure or too much information can lead to members being less informed. Moreover, NCUA already has tools in place to ensure that mergers are not unduly influenced by credit unions seeking to merge.”

“Absent a compelling reason or the mandate to satisfy the requirements of a new law, an update to a regulation should not add additional burdensome requirements for credit unions,” the letter reads.

Cornerstone and CUNA will work with the NCUA to communicate credit union concerns with the proposed merger rule. 

If you need help in crafting your own letters, or if you have questions, please visit the Compliance section of Cornerstone website or contact Cornerstone SVP Regulatory Compliance Suzanne Yashewski at or 512-853-8516.