NCUA spelled out this week process details and reasoning behind some of its conservatorship and merger policies, which have come to the fore this month following a spate of failures of small to medium size CUs.
The disclosure follows heightened internal industry debate on exactly how the regulator chooses and follows through with "bidders' conferences" and evaluations of suitors named to acquire or merge the troubled CUs.
In a statement to Credit Union Times, which focused just on Region IV, NCUA said it invites CUs to bidders' conferences by looking "at the capital structure, complexity of the continuing credit union's balance sheet, delinquency and loan loss performance as well as earnings performance" making a selection based on what CU "we feel can handle the merger."
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In some cases, "we may not feel the credit union is large enough to assimilate the problem credit union without being detrimental to their own operation" said the NCUA statement.
It also described the long lead time on this week's conservatorship of West Texas CU in El Paso being acquired by Security Service FCU of San Antonio. In that case, the NCUA had a problem and held multiple bidders meetings "to obtain an acceptable bid from the first merger meeting."
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