NAFCU requests more transparency in emergency mergers rule

WASHINGTON, DC (September 30, 2017) — National Association of Federally-Insured Credit Unions (NAFCU) Regulatory Affairs Counsel Ann Kossachev today wrote the National Credit Union Administration (NCUA) requesting that the agency provide more information regarding the NCUA’s proposed change to its “in danger of insolvency” definition as it relates to emergency mergers.

The letter is in response to the proposal made during the NCUA’s July board meeting. The proposal is intended to give the agency more flexibility in situations where an emergency merger is necessary.

The NCUA proposes to add a fourth category to the “in danger of insolvency” definition and, for two of the three current categories, lengthen by six months the timeframe the agency has to forecast a credit union’s future insolvency when a predictive assessment of the credit union’s declining net worth is in play.

NAFCU is overall supportive of the modification to modernize forecasting procedures for emergency mergers. In the letter, Kossachev suggested more transparency from the agency as it starts following the new timeline for determining “in danger of insolvency.”

The best way to guarantee that the NCUA effectively helps troubled credit unions merge with willing partners “in a timely and efficient manner is to most accurately predict when a credit union is likely to become insolvent,” wrote Kossachev. “As part of this process, prospective merger partners should be fully apprised of important information regarding the selection process and should also have the opportunity to make their case for the merger. Additionally, the NCUA should provide prospective merger partners with a written explanation of the reasons for its decision.”


The National Association of Federally-Insured Credit Unions is the only national trade association focusing exclusively on federal issues affecting the nation’s federally-insured credit unions. NAFCU membership is direct and provides credit unions with the best in federal advocacy, education and compliance assistance. For more information on NAFCU, go to or @NAFCU on Twitter.


Molly Safreed, (NAFCU)

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