In Sarah Snell Cooke's column of Sept. 30, she hit the nail on the head of a significant issue for both the NCUA and credit unions. And the impact of failing to deal with this issue could be extremely costly to the NCUSIF, which should be a cause of concern of both the NCUA and the credit unions that fund it. "What's absurd about the law is that the NCUA can't merge an ailing credit union with a healthier one that doesn't have a similar field of membership until the credit union has actually dipped below 2% capital," Cooke wrote. "This nonsensical requirement only serves to inflict more damage on the surviving credit union, the NCUA, and the attitudes of the failing credit union's members." Right on the mark. Couldn't have said it better myself. The present statutory interpretation is that the NCUA cannot declare an emergency merger and set aside FOM differences until the struggling credit union is so distressed that very few, if any, credit unions are willing to accept the merger-even with the NCUSIF guarantees. It amounts to a situation where a patient cannot be given a transfusion until he is on his death bed. As Cooke correctly put it, that makes no sense. The NCUA's hands should not be tied, either by statute or interpretation, from freeing a struggling credit union from the FOM restraints that would prevent it from being matched with the best possible merger partner. The result of a credit union merger that is driven by financial stability and member service, rather than arbitrary FOM constraints, will be more positive for everyone involved-the merging credit unions, the NCUSIF and the credit union members involved. If it requires legislation, this should be a priority. If it can be handled through a broader application of the emergency merger authority, that should be done. The NCUA needs the flexibility to make emergency mergers happen where there is the best fit-financially, culturally and member-service wise. The financial picture of the continuing credit union, its culture or its membership base should not have to pay the cost of a merger driven primarily for a consistency of FOM. Neither should the NCUSIF have to fill the gaps when mergers have to wait until they are a dire emergency.

Dennis Dollar Principal Partner Dollar Associates LLC Birmingham, Ala.