ALEXANDRIA, Va. — The NCUA Board on Thursday approved a ruleallowing assistance to a troubled credit union or a credit unionacquiring a troubled credit union to count as regulatory networth.

The rules change implements a law passed by Congress late lastyear, and involves assistance under Section 208 of the FederalCredit Union Act.

The final rule contained a provision, to which several trade associations and credit unions objected, todeduct “bargain purchase gain” in certain credit union mergers fromregulatory net worth. The term refers to a gain on financial assetsacquired for less than fair market value.

Karen Kelbly, the chief accountant of the agency's Office ofExamination and Insurance, said in response to a question from NCUAChairman Debbie Matz during the meeting at NCUA headquarters thatthe definition change wouldn't negatively impact the number ofcredit union mergers.

Kelbly said based on the analysis of 11 mergers in 2010 in whichthis would have been an issue, it would have only have had a“negligible” impact on the credit unions involved. Under the newrule, the retained earnings of the acquired credit union must bemeasured under Generally Accepted Accounting Procedures. Inaddition, the agency decided not to require credit unions thatreceive such assistance to list it on their Call Report.

Kelbly said that publicizing such information “might cause thepublic to be unnecessarily alarmed,'' and move their money to otherfinancial institutions.

The rule also mandates that the NCUSIF equity ratio must bebased solely on the financial statements of the NCUSIF, and notcombined with other financial statements.