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CUs: File Your Comment Letters Today on NCUA's Mergers Proposal
Friday, September 29, 2017 7:00 AM

Credit union advocates are urged to file comment letters today regarding the National Credit Union Administration's proposal to amend its emergency mergers requirements. Comments are due Sept. 29.

The amendment will expand the NCUA's definition of “danger of insolvency” to give the agency more ability to determine that a credit net worth will decline and become a candidate for an emergency merger. The proposal also includes a fourth category, and together the amendments enable NCUA to approve emergency mergers without regard to common bond or other legal restraints. View CUNA's summary of the proposal.

Cornerstone Credit Union League yesterday filed its comment letter regarding the proposal. Suzanne Yashewski, SVP regulatory compliance, wrote, "Cornerstone generally supports the proposal which would refine the current definition of the term "in danger of insolvency" by extending certain forecast horizons (where the credit union's net worth is expected to either become insolvent or drop below 2 percent net worth ratio, from 24 to 30 months and 12 to 18 months, respectively) and adding a fourth category for credit unions assisted under section 208 of the Federal Credit Union Act in the 15 months prior. The credit union system will benefit by protecting net worth, improving merger prospects, and mitigating costs to the National Credit Union Share Insurance Fund."

"The proposal seeks to permit supervisory mergers in cases where such mergers are not only necessary to preserve asset  value, but  will also maintain the fields of  membership of  both credit unions, guaranteeing fair and widespread consumer access to the financial services offered through credit  unions," Yashewski wrote. "The proposal would permit NCUA to act decisively at an earlier stage of resolution than current regulation permits, at a time when more assets can be salvaged and liquidity preserved for the benefit of member-owners. However, Cornerstone opposes aspects of a rule change that would result in rigid guidelines forcing credit union mergers."

Take action! Send your comment letter today!

Please visit Cornerstone's compliance site here for details on how to respond, talking points, summary of the proposal, and resources. Your comment letters work!

If you have questions, please contact Suzanne Yashewski at 512-853-8516 or via email at syashewski@cornerstoneleague.coop.