Learn how credit unions can utilize the NCUA's Merger Partner Registry to expand their field of membership.
For credit unions looking to expand their field of membership via a merger or purchase and assumption, the NCUA offers assistance in the form of its Merger Partner Registry.
The registry allows institutions interested in acquiring a troubled credit union to make this known to the agency and be considered in future searches for suitable partners.
What Types of Transactions Does the Registry Apply To?
The registry is used for two types of transactions, both of which involve a healthy credit union acquiring another credit union’s field of membership.
These are “assisted mergers of troubled credit unions” and “purchase and assumptions (P&A) of liquidated credit unions.”
The registry does not apply to voluntary mergers between healthy credit unions.
How Does the Registry Actually Work?
Credit unions express their interest in consolidations by signing up for the registry on the NCUA’s website. Users are asked to select their preferred geographic area for potential merger partners, which can range from specific cities and counties all the way to nationwide.
The NCUA then seeks suitable partners based on this input along with a credit union’s “financial health, asset base, field of membership, service facilities, product offerings, and several other factors.”
From this information, the agency identifies the best possible match for each acquisition and provides financial support from the National Credit Union Share Insurance Fund (NCUSIF) to help facilitate the transaction. For instance, the NCUA may guarantee a fraction of future losses on outstanding loans from the acquired institution.
Are You Guaranteed to Find a Partner?
No. The NCUA makes it clear that signing up for the registry is not a guarantee that a credit union will be selected for a merger or purchase and assumption. This is due to the fact there may be many potential acquirers as well as the process itself requiring “a great deal of due diligence.”
Why Was the Registry Created?
The NCUA explains that it created the registry both to build a “wider pool of interested credit unions to consider assisted merger and P&A opportunities,” as well as a response to calls from credit unions for greater transparency on the agency’s process of selecting merger partners.