NCUA Board Approves Proposed Rules on Mergers, Appeals

The NCUA Board recently approved three proposed rules and released them for comment. The proposed rules cover member communications in voluntary mergers, enhancement of due process in supervisory appeals, and appeals of some agency decisions.

Comments on each of the proposed rules must be received within 60 days of publication in the Federal Register.

Proposed Rule Opens Up Member Communications in Voluntary Mergers

Members whose federal credit unions are seeking a voluntary merger would have better access to information about that merger and more time to consider their votes under this rule.

The proposed rule would:

  • Increase the required time for notice to members before a merger vote to at least 45 days;
  • Require the merging credit unions to disclose all merger-related compensation for certain employees and officials of the merging credit union;
  • Clarify the contents and format of the members’ notice to provide better information; and
  • Create a member-to-member communications process similar to that found in NCUA’s regulations covering credit union conversions to or mergers with banks.

Due Process in Supervisory Appeals Enhanced by Proposed Rule

Appeals of material, examination-related supervisory determinations would benefit from greater due process under this rule.

Changes in the appeals process under the proposed rule would include:

  • Expanding the number of material supervisory determinations that can be appealed to the agency’s Supervisory Review Committee;
  • Creating an optional intermediate level of review before an appeal goes to the Committee; and
  • Changing the nature and composition of the Committee.

Under the proposed rule, an appeal at any level would not affect, delay, or impede any formal or informal supervisory or enforcement action in progress. Likewise, it would not affect NCUA’s authority to take any supervisory or enforcement action against a federally insured credit union.

Appeals of Some Agency Decisions Improved under Proposed Rule

A proposed rule would create a more uniform process for appealing certain program office decisions to the Board.

Several existing NCUA regulations provide a right of appeal, but these generally lack uniformity and may be confusing to parties who might seek to appeal an adverse decision to the Board. The proposed rule would bring these under a uniform set of procedures and would enhance due process for all parties.

The new rule would affect chartering and field of membership, investment authority, conversions and mergers, creditor claims in liquidations, and share insurance determinations. Certain areas, such as formal enforcement actions, prompt corrective action, and material supervisory determinations, would be excluded from coverage under the proposed rule.

Questions? Contact the Compliance Hotline: 1.800.546.4465,

Compliance Question of the Week

What can we do if a member has declared bankruptcy and the member only wants to reaffirm on one, but not all, of the loans the member has with us?      

Reaffirmation is completely voluntary for both the member and the credit union. While the member does not have to reaffirm, the credit union can refuse to accept a reaffirmation that it does not like. If a member wants to reaffirm on the car loan so that she can keep her car, but the credit union wants her to reaffirm on both the car loan and the Visa, the credit union can reject the member’s offer to reaffirm on only the car loan. This is risky because the member might decide to reject this offer, and then the credit union will not have any reaffirmation. Of course, if the member does not reaffirm, the credit union can repossess the car. Using this tactic is a business decision on the credit union’s part.

Related Links:

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Questions? Contact the Compliance Hotline: 1.800.546.4465,

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Questions? Contact the Compliance Hotline: 1.800.546.4465;


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