Facilitating the sharing of member-to-member (MTM) communications when a federally insured credit union is merging with another is addressed in a letter to credit unions (LTCU) published Monday by their federal regulator.
The National Credit Union Administration (NCUA), in its LTCU 18-CU-03,also noted that it has established an MTM communications process to facilitate the information sharing (as part of its rulemaking).
According to the letter, a federally insured credit union proposing to merge with another federally insured credit union is required to include in its member notice of the merger a statement about the availability of a website where members of the merging credit union can share comments or questions with each other about the proposed merger. Through the website, members may jointly or individually submit a comment and attachments about the merger, NCUA said.
The agency also said its office of Credit Union Resources and Expansion (CURE) will, prior to website posting, review each submitted communication. NCUA said its rules give it the right not to post a communication that the agency “reasonably believes” is: false or misleading; omits a material fact necessary to make the statement in the material not false or misleading; advances a personal claim or personal grievance, or solicits personal gain or business advantage by or on behalf of any party.
The agency said in its letter that it also reserves the right to block a comment or attachment which “directly or indirectly and without expressed factual foundation” impugns the character, integrity, or reputation of a person; makes charges concerning improper, illegal, or immoral conduct; or “makes statements impugning the safety and soundness of the credit union.”
All federally insured credit unions – federal and state-chartered – must submit a proposed merger application to the agency for review and application, NCUA said. For a merging federal credit union, once it has received permission from NCUA to proceed with a membership vote on the merger, it must send a copy of its notice to the CURE office. That notice must be emailed to the agency by the FCU at least 15 days before it its mailed to members, and must include a link showing a credit union-specific MTM web address “where members can find how and where to submit comments pertaining to the proposed merger,” NCUA said.
A state-chartered federally insured credit union, NCUA said, must comply with the requirements of its state regulator, in addition to applicable requirements of the NCUA’s merger rule. “Unless a membership vote is waived under state law, the NCUA must receive a copy of the notice at least 15 days before any mailing of the member notice (or equivalent state document),” the letter notes. “The notice must include a link to a credit union-specific MTM web address where members can find how and where to submit comments pertaining to the proposed merger.”
The NCUA letter states that members of a merging credit union may submit comments using the specific MTM web address provided, and that each comment submitter will be asked to provide certain personal information. “Once CURE reviews and posts a comment, it will be accessible for viewing at the merging credit union’s MTM-URL address,” the letter states.
Regardless of credit union charter type, the agency said the member notice must:
- Include a link where members can find how and where to submit comments;
- Be emailed to the agency’s CURE office at least 15 days before it is mailed to members;
- Be received at least 45 but no more than 90 days before the meeting date by the members of the credit union proposing to merge.
In other areas, the NCUA letter addresses:
- The merger rule requires an update by merging federal credit unions to their bylaws (which should be adopted prior to submitting the proposed merger application to the agency); state-chartered credit unions should refer to their individual state agencies.
- A merging credit union must disclose certain merger-related financial arrangements for covered persons in its member notice.
- Merging and continuing credit unions must certify (by the board presiding officer and CEO) that there are no other merger-related financial arrangements other than those disclosed in the notice to the members of the proposed merging credit union.