The National Credit Union Administration should complete the process for reviewing bank purchases by credit unions no later than 60 days after an application is filed, several credit unions have told the agency.
“The NCUA should reasonably be able to consider an application for a combination transaction in a 60-day window, the same as the FDIC,” Don Cates, president/CEO of 3Rivers Federal Credit Union in Ft. Wayne, In., told the agency.
The NCUA has been soliciting comments on a proposed rule governing credit union-bank purchases. Agency officials have emphasized that the proposal would not substantively change existing rules, but instead, would clarify agency policy. Comments on the rule were due last week, but some are just being made public this week. The proposal does not set a specific time period for NCUA approval of the deals.
Bankers have asked for stricter NCUA rules governing such purchases, but that is not needed, said Michael Miller, president/CEO of iTHINK Financial Credit Union in Boca Raton, Fl.
“In our experience, these combination transactions are voluntary, market-based business arrangements,” that require regulatory approval, he said. “It is not necessary to place regulatory requirements that could negatively impact the transactions or consumers.” He went on to ask for a specified timeline for approval of those deals.
Kevin Johnson, president/CEO of Suncoast Credit Union in Tampa, Fl. agreed. “In these transactions, once an announcement has been made that a merger application has been submitted, time is of the essence,” he told the NCUA. He added that the longer it takes for regulatory action, the more uneasy investors become. He said that it is difficult to plan when one regulator has a deadline, and another does not.
Johnson recommended that the NCUA establish parity with the FDIC and set a 60-day regulatory review deadline. Johnson said that if more time is needed, the agency could contact the financial institution and provide the basis for the extension.
Establishing a deadline for regulatory review would not impede the agency review process, said attorneys with Hunton Andrews Kurth, a Washington, D.C. law firm that has represented credit unions and banks in mergers. “We do not believe establishing a processing timeline will impede the NCUA’s ability to process the application in a safe and sound manner or cause an undue burden given the relatively small number of such applications,” they told the agency.