From the March-20, 2002 issue of Credit Union Times Magazine • Subscribe!
Colorado State Financial Services Board adopts merger regulation
<p>DENVER - State-chartered credit unions in Colorado that want to merge now have a strict set of guidelines they have to follow for the Colorado State Financial Services Board to consider their application. Commissioner David Paul said "there needed to be standards so we can make statutory determinations on credit unions' applications to merge." The promulgated rule requires: A plan of merger is to be prepared by the affected credit unions that includes certain information and terms related to the proposed merger; The members are to be provided certain information related to the merger prior to their vote on the merger as mandated by statute; At least 21 days prior to sending the meeting notice and merger information to members, the information is to be submitted to the Commissioner for his review; When the members have authorized a merger, the rule also sets out the requirements for CUs to comply with in the filing of information with the appropriate regulatory authorities. The rule also outlines the standard the Commissioner will use to determine that the merger is in compliance with Colorado law; The rule may be applied to transactions between credit unions under C.R.S. 11-30-104(1)(k), and it cannot be waived in the case of mergers initiated for supervisory reasons. The merger regulation became effective late last year. Paul said his office has not yet received any merger applications from credit unions this year. Last year though there were five mergers, and Paul said this was the most since 1997 when there were four mergers. While four out of 2001's five mergers were the "typical small CU. merging into large credit union" situation, one of last year's mergers involved $45 million Mountain Bell CU of Colorado Springs merging into $1.3 billion ENT FCU, the largest credit union in the state. "This was the first time we had a voluntary merger between two large credit unions, where neither was going through any safety and soundness troubles," said Paul. "You usually don't see that happening with credit unions of this size." Paul said that merger was a catalyst in getting the state's Financial Services Board to draw up the regulation. Prior to the promulgation of the merger regulation, the merger application filing and decision determination process was very informal, said Paul. It was done on a case-by-case basis and the "degree of scrutiny" of member benefits resulting from the merger depended on the circumstances of the merger. "Members have a right to know the terms of the merger of their credit union before they vote on it. Then they'll be equipped to make a sound decision. It's their decision to make," said Paul. "We're overseeing the process to make sure members get the proper information to make a sound decision, rather than us substituting our own judgment." -</p> <p>firstname.lastname@example.org</p>