In a letter to the secretary of the NCUA board on Monday, William J. Mellin, New York Credit Union Association president/CEO, responded to a NCUA proposal (RIN 3313–AF10) clarifying a framework for the review of non-credit union/credit union mergers by NCUA, saying that it is in the interest of both regulators and financial institutions to have a clearly delineated process.

In the letter to Gerard Poliquin, NCUA board secretary, Mellin stated that while credit union/non-credit union transactions are relatively rare, they are increasing. Having a clearly delineated process and a properly drafted framework should “foster an even handed evaluation of these mergers, result in credit union parity with non-credit unions and, most importantly, provide more consumer choice,” the letter stated.

Mellin also stated that the requirement mandating that depositors agree to become credit union members before the merger, “while well intended, will needlessly complicate proposed mergers.”

That “road block,” however, is easily addressed by authorizing the share insurance fund to immediately insure the depositor accounts, making existing depositors within a credit union’s existing field of membership presumptive members of the new credit union and giving them a certain amount of time to opt-out of membership, Mellin stated.

Mellin also said that NCUA should reduce the criteria it proposes to use in evaluating whether or not a proposed credit union/non-credit union combination should be approved.

While the Association believes that combination transactions involving non-credit union mergers into credit unions expand consumer choice and access to financial resources and are consistent with the credit union mission, it is “committed to supporting NCUA should any opportunities arise to improve or build upon this framework,” Mellin said.