ST. PAUL, Minn. — The Minnesota Credit Union Network felt that Wings Financial Federal Credit Union should have honored Continental FCU's board March 20th decision to vote against the merger, but the network is glad a page has been turned.
The $1.6 billion Wings Financial FCU decided Friday to withdraw its merger proposal days after NCUA determined that the $200 payments it were offering to Continental's members should a merger ever occur was impermissible under the Federal Credit Union Act.
"We're very glad with the decision [Wings Financial] has made," said Mark Cummins, president/CEO of MnCUN. "We're still looking forward to NCUA taking an overall look at any rule making and what the proper rules should be should this occur in the future. We have to look far enough into the future to use this as a wake up call."
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NCUA told Wings Financial that per capita dividend payments are not allowed. The unilateral promise of a dividend by the continuing CU in a proposed merger, without the approval of the merging CU, is also not permitted, the regulator noted.
Wings Financial said NCUA's decision on the $200 payments, "materially changes the terms of our offer" and would require it to re-solicit Continental's membership, a move that "is not practical," the CU pointed out.
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