Last-minute relief: Agency extends comment date on proposal governing credit union acquisition of banks on day comments were due

Sweating over Monday’s deadline to submit your comment letter on “Combination Transactions with Non-Credit Unions?” No worries: take a breather, kick back, grab a cold one – the federal credit union regulator Monday gave you 60 more days to hit the send button.

In a release, the National Credit Union Administration (NCUA) said it had extended the comment period for its proposed rule to clarify requirements for a federally insured credit union (FICU) when it proposes to acquire or merge with a bank or other institution. The comment period (which was scheduled to close Monday after a 60-day period) will now run an additional 60 days from the date the extension notice is published in the Federal Register. Most likely the comment period will run until the first of June or so.

The NCUA announcement gave no reason for the comment period extension; however, the agency noted that the board voted Friday (March 27) to extend the comment date. As of Monday, the federal website showed only eight comments received so far.

In proposing the rule in January, the agency noted that credit union acquisitions of banks – which, historically, have been rare occurrences – has seen an uptick recently. For example, the proposal includes a chart showing 15 credit union acquisitions in 2019 (for all or part of another institution’s assets and liabilities) – but 17 already pending for 2020. Between 2013 and 2017, according to the NCUA numbers, only 20 such transactions were made.

“Because of a desire to add even more transparency, and the questions the NCUA has received recently from FICUs, the Board believes it would be beneficial to clarify the processes and requirements related to FICU applications for these transactions,” the agency wrote in its proposal. “This increased transparency will assist FICUs seeking to engage in these transactions to meet the NCUA’s requirements.”

However, the uptick in credit union acquisitions has raised the objection of some in the banking industry who have called credit union acquisition of banks “yet another example of how credit unions are pursuing aggressive growth opportunities while falling short of their statutory mission to serve households of small means.”