NCUA should reconsider provisions within bank conversion, merger proposal
Responding to the NCUA’s proposal to amend regulations regarding mergers and conversions of federally insured credit unions to banks, America’s Credit Unions’ comment letter opposes certain aspects of the proposed rule.
The letter reiterated support for credit union charters and the cooperative finance model but made clear that credit unions do not advocate for policies that encourage or create incentives for credit unions to convert to bank charters.
Suggestions to review and modernize existing regulations as part of the NCUA’s Deregulation Project include:
- Eliminating overly rigid formatting requirements such as "clear and conspicuous" that require specific font sizes and bolding requirements as they are outdated and may be less effective for digital communications;
- Removing the newspaper publication requirement as this no longer reflects how most members receive information. In today’s market, posting notices through online formats is most conducive to how members interact with their credit unions;
- Maintaining the requirement that key disclosures appear in a distinct, standardized format because prominent disclosures help to ensure members understand the consequences of a bank merger, including impacts on ownership interests;
- Keeping the plain language requirement as it is necessary that member communications remain clear, understandable, and consistent across credit unions; and
- Retaining non-regulatory voting guidance because it provides useful procedural directions, promotes consistency, and reduces uncertainty for credit union boards and members.
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