A new policy on public disclosure of proposed mergers between credit unions – and facilitating public comments on the mergers – made effective in October by the federal regulator of credit unions has so far netted three merger proposals, including the latest posted Thursday. However, no public comments on any of the mergers have yet been made public.
According to the tally on Regulations.gov (a web-based portal supporting the federal government’s rulemaking process), three mergers among six credit unions have been proposed since the policy was made final by the National Credit Union Administration (NCUA). The merger proposals were posted on the website Jan. 10, Dec. 21 and Dec. 19.
Under the policy – adopted by the agency in June and given an effective date of Oct. 1, 2018 – a federally insured credit union (FICU) proposing to merge with another FICU is required to include in its member notice of the merger a statement about the availability of a website where its members can share comments or questions with each other about the proposed merger. Through the website, members may jointly or individually submit a comment and attachments about the merger, NCUA said when it adopted the rule.
The agency has also (through its office of Credit Union Resources and Expansion [CURE]) reserved the right to review, before a website posting, each submitted communication. NCUA, in a “Letter to Credit Unions” last fall (LTCU 18-CU-03), said its rules give it the right not to post a communication that the agency “reasonably believes” is: false or misleading; omits a material fact necessary to make the statement in the material not false or misleading; advances a personal claim or personal grievance, or solicits personal gain or business advantage by or on behalf of any party.
To date, no comments have been made public – at least not on the Regulations.gov website – for the three proposed mergers. The website lists no “comments received” on any of the proposed mergers.
On Thursday, the member notice was posted on Regulations.gov for the proposed merger of Soo Line CU of New Brighton, Minn., into Central Minnesota CU of Melrose, Minn. The notice states that “NCUA will review comments before posting them to ensure the comments are appropriate and limited to the topics of the proposed merger.” No comments were included. A “special meeting” about the merger is scheduled for Feb. 26.
Previously, member notices for the proposed mergers of District 8 Highway Employees CU of Springfield, Mo., into Metro CU (also of Springfield), and the merger of STAR CU of Madison, Wis., with Summit CU (also of Madison) were posted. No comments were attached to either. “Special meetings” for the proposed mergers are scheduled, respectively, for Feb. 19 and Feb. 6.
When the rule was adopted in June, the two members of the NCUA Board lauded its development (which took about one year) and ultimate disposition.
Board Chairman J. Mark McWatters said some might argue that the rule’s disclosure requirements present a regulatory burden to credit unions. “It think it is a modest burden if anything,” McWatters said. “I also think there is a great deal of regulatory relief when you tell members of a credit union all of the material information that they need in order to make a decision.”
Board Member Rick Metsger echoed McWatters’ remarks about the final rule, which he called “significantly modified” from that proposed the previous year. The final rule, he said, “places little burden on credit unions, member-to-member discussions (about mergers) will be hosted and moderated by NCUA – and most importantly, when merger compensation is provided, the members will receive notification and can make an informed choice on whether the merger is in their best interests.”