Wisconsin Joins Other Leagues in Adopting Unsolicited Merger Protections
PEWAUKEE, Wis. -- Taking a stance against unsolicited merger attempts, the Wisconsin Credit Union League is joining a handful of other leagues that have adopted resolutions offering some guidelines.
On June 12, the league's board of director's put in place a resolution that states third parties do not have a right to interfere in the business operations of a credit union or the ability of its board to act in the best interests of its members. Third parties are also not allowed to provide "inaccurate or misleading" communications to members of another CU, according to the resolution.
"Unsolicited attempts to affect unwanted mergers by encouraging ill-considered decisions to declare dividends can raise serious safety and soundness concerns, and the authority of one credit union to spend funds to influence member votes at another credit union should be subject to serious review by regulators," the resolution states.
Until state and federal regulators adopt regulatory provisions, including model bylaw provisions, which would provide sufficient guidance and protections for credit unions that are the subject of "uninvited takeover attempts," WCUL said they "should agree to refrain from approval of any application that has resulted from an uninvited attempt to take over a credit union."
The Wisconsin league joins the Minnesota Credit Union Network, Association of Vermont Credit Unions, New York State Credit Union League Inc. and the Maryland and District of Columbia Credit Union Association in adopting unsolicited merger resolutions.
The resolutions are the result of a recent merger proposal campaign from $1.6 billion Wings Financial Federal Credit Union towards $182 million Continental Federal Credit Union, which turned down the offer. Wings continued its campaign to Continental's members offering such incentives as $200 payments if the merger went through. NCUA essentially stopped the campaign ruling the payments impermissible under the Federal Credit Union Act.