PRESS RELEASE

June 27, 2007

NASCUS Comments on NCUA Proposed Merger Compensation Rule

ARLINGTON, Va. — The National Association of State Credit Union Supervisors (NASCUS) filed comments on June 22 with the National Credit Union Administration (NCUA) on its proposed rule regarding the disclosure of merger compensation.

NCUA’s proposed rule contains provisions applicable to state-chartered, federally insured credit unions and provisions applicable only to federally chartered credit unions. As the professional association of state regulators, NASCUS’ comments were limited to the provisions of the rule applying to state-chartered, federally insured credit unions.

NASCUS agrees that the board and management of a merging credit union must act in the best interest of the institution and the membership. However, as discussed in its comment letter, NASCUS believes that NCUA’s responsibility with regard to merger compensation should be limited to the insurability of the continuing credit union.

“When two state-chartered credit unions merge, NCUA’s proper role is to ensure the surviving institution is sufficiently capitalized and managed so as to absorb the merged credit union without posing a material risk to the insurance fund,” stated NASCUS. “It is for state regulators to decide whether a board decision to merge state-chartered credit unions was unduly influenced.”

In summary, NASCUS wrote that NCUA’s emphasis in the merger of two state-chartered, federally insured credit unions should be the continuing insurability of the surviving entity. NASCUS appreciates the opportunity to comment on the proposed rule. To view NASCUS’ comment letter, click here.

Information Contact:
Kate Hartig, Director of Communications, (703) 528-0669 or kate@nascus.org

The NASCUS mission is to enhance state credit union supervision and advocate a safe and sound state credit union system. Founded in 1965, NASCUS represents all 48 state and territorial credit union supervisors and the NASCUS Credit Union Advisory Council, which is made up of nearly 500 of the nation's more than 3,400 state-chartered credit unions.