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September 15, 2008 - NASCUS has received several questions as of late about the amendments to net worth that would allow credit unions to still pool their assets in a merger, thereby circumventing the accounting changes of Financial Accounting Standards Board (FASB) 141.
The National Credit Union Administration (NCUA) is proposing regulatory amendments to Parts 702 and 704 to give effect to a statutory change to the definition of a natural person credit union’s “net worth.” The amendment would expand the definition of “net worth” to allow the acquiring credit union, in a merger of natural person credit unions, to include the merging credit union’s retained earnings with its own to determine the acquirer’s post-merger “net worth.” In a merger of corporate credit unions, the proposed rule would similarly redefine corporate credit union capital to allow an acquiring credit union to include with its capital the retained earnings of the merging credit union to determine the acquirer’s post-merger capital.
The latest NASCUS Regulatory Affairs Rule Summary addresses this proposed rule. To view the summary for more information on this issue, follow this link (Member log-in required.)
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