By contrast, during the first six months of 2009 there were nine credit union failures, including six assisted mergers and three involuntary liquidations. There was one purchase and assumption among the involuntary liquidations.

Matz wrote that the registry will allow credit unions to identify the parameters in which they want to be considered, such as asset size range, geographic limitations, field of membership and minimum net worth levels.

She added that the criteria the NCUA will use to pick the merger partner include: The impact on the credit union's safety and soundness; whether it is a good fit in terms of membership; whether the management operations can be integrated; can the credit union provide the same level of services to members as the failing one did; and additional offerings by the bidding credit union such as a promise to keep certain locations, products and employees.

Matz noted that while the agency tries to contact as many credit unions as possible to ensure that the bidding process is competitive, there is no set number of candidates the NCUA must contact. She noted that there are practical limits on the number of institutions on which the agency can conduct due diligence.

Currently, each of the agency's regional offices maintains a manual list of interested potential merger and purchase and assumption partners.

The top regulatory lobbyists of CUNA and NAFCU both praised the letter as a good first step toward addressing concerns raised by many credit unions. However, they said they want to see how the new policies are implemented, and they want to be sure that more credit unions are invited to become merger partners or buyers of the assets and liabilities of troubled credit unions.

"The letter provides information that will be helpful and gives additional guidance that credit unions are looking for. It spells out the process for submitting bids," said Carrie Hunt, NAFCU senior counsel and director of regulatory affairs. "But we will still be talking to our members about its impact on them. While the letter is helpful to our members, it still gives the NCUA a tremendous amount of flexibility in terms of what it can and can't do when finding merger partners."

Mary Dunn, CUNA senior vice president and deputy general counsel, said credit unions will still be concerned about whether they will have the opportunity to offer bids.

"It appears to many credit unions that some are chosen again and again as merger partners. At least now credit unions will have a policy in writing that they can point to and see if the NCUA is following it," she said.

Dunn said that executives of about 40 credit unions have expressed concern about what they perceive as the NCUA's previous lack of transparency regarding how merger partners are chosen.

In May, CUNA's task force on the subject called for a registry similar to FDICconnect, a secure site that lets banks get information about acquiring problem banks and then register if they want to be considered as a partner.

In a March letter to Matz, NAFCU President/CEO Fred Becker suggested the NCUA offer specific guidance and establish registries at each of its regional offices.

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