How Do Credit Union Mergers Work?
The NCUA’s Chartering and Field of Membership (FOM) Manual defines a “merger” as: “Absorption by one credit union of all of the assets, liabilities and equity of another credit union.”
As such, the joining of two or more credit unions will naturally often lead to an amendment of the resulting institution’s field of membership. Additionally, due to the differing restrictions surrounding each credit union charter type, the regulations regarding mergers vary on a case-by-case basis.
That said, the Agency does lay out the following general stipulations:
–A federally insured credit union must have the prior written approval of the NCUA before merging with any other credit union.
–Where the continuing credit union is a federal credit union, it must be in compliance with the chartering policies of the NCUA.
–Where the continuing or merging credit union is a state credit union, the merger must be permitted by state law or authorized by the state authority.
It is further noted that any fields of membership to be joined by a merger must be “compatible,” that is, in line with NCUA chartering and FOM regulations unless it is an emergency merger.