NCUA Voluntary Merger Rule Provides Greater Transparency for Members

Members of a federally insured credit union seeking a voluntary merger will now have access to more information and receive additional time to consider their votes under final rule approved by the National Credit Union Administration (NCUA) Board Thursday.

The final rule will apply to all federally insured credit unions with several new changes including, an Increase in the minimum required time to notify members before a merger vote. Members will now have 45 days, which was increased from the 7 days previously allotted.

The rule will also require merging credit unions to disclose merger-related compensation increases above $10,000 or 15 percent of compensation, whichever is greater, for certain employees and officials of the merging credit union. They must also clarify the contents and provide clear information to its members’ and a method to communicate to the NCUA regarding the proposed merger.

In 2017, The MD|DC Credit Union Association submitted a comment letter to the NCUA based on input from affiliated credit unions during the public comment period.

The rule takes effect October 1, 2018.