Major credit unions call off merger after NCUA delay

Major credit unions call off merger after NCUA delay

On Behalf of | Sep 26, 2012 | Uncategorized |

Getting the details of a merger worked out and agreed on by the leadership of both organizations can be an ordeal, but it is not the only potential issue that business owners need to consider. Implementation of merger plans can lead to a business dispute. In addition, mergers often need to meet strict governmental regulations that require significant oversight. Without the proper preparations and expectations, this step in the process can be a major roadblock to a successful merger.

This regulatory process is being cited as the primary reason why two major credit unions, the Corporate America Credit Union and the Louisiana Corporate Credit Union, have called off their merger. Leadership at Corporate America made a statement saying that the wait for approval from the National Credit Union Administration had grown too long, and both organizations would prefer to move on with different plans rather than continue to stall.

The delay in the approval process may be related to a dispute between the former CEO of Corporate America and a former director at the NCUA. Others within the field have criticized the NCUA over the incident, charging that the behavior of the director in question was responsible for the merger’s delay.

Both organizations are interested in maintaining interconnectivity in their future dealings, such as continued collaboration on current projects as well as new projects created in the interest of strengthening one another. Whether or not the two will consider re-attempting the merger again at a later date is currently unknown.

As this story shows, the governmental aspect of mergers can prove problematic. While many of these potential problems can be solved by preparing well in advance with lawyers familiar with the mergers and acquisitions process, some situations are made impossible to successfully resolve due to either the regulation process itself or other unexpected variables such as, in this case, time considerations.

Source: Credit Union Times, “NCUA Stalls Corporate America/Louisiana Corporate Merger to Death,” Heather Anderson, Sept. 17, 2012