SOUTH BURLINGTON, Vt. -- The Association of Vermont Credit Unions is the latest to adopt a resolution that supports providing protections for credit unions as "hostile" takeover targets.

The resolution says taking into consideration the best interests of the members, a CU's board has the right to approve or disapprove a merger proposal. Third parties also have no right to interfere in the business operations of a CU or hinder its ability to act in the best interests of its members. Credit unions or other third parties cannot provide "inaccurate or misleading" communications to members of another CU, the resolution reads.

"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," according to the resolution.

AVCU has called on NCUA and the Vermont Department of Banking, Insurance

Securities and Healthcare Administration to "reinforce credit union principles of cooperation and reaffirm the strongest support for honored credit union values." Regulators should refrain from approving any merger application that has resulted from a hostile attempt to takeover, AVCU suggested.

The Minnesota Credit Union Network previously adopted a similar resolution regarding unsolicited takeovers.

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Vermont League Adopts Resolution for 'Hostile' Takeovers

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