Thursday, February 25, 2016

Legal Opinion Letter on Merging Credit Unions into A Network

In a legal opinion letter to Hoosier Hills Credit Union, the National Credit Union Administration (NCUA) stated that it is permissible for merging multiple group federal credit unions to operate as a network of credit unions.

NCUA stated that the merged credit union (non-surviving credit union) can continue to operate under the merged credit union's name. However, NCUA cautioned that credit union operating under more than one name must ensure its members understand they are dealing with one credit union rather than different credit unions.

The letter also stated that the Federal Credit Union Act permits the continuing credit union to appoint an advisory committee comprised of officials of the merged credit union to serve in an advisory role.

Finally, the continuing credit union may reserve one seat on its nominating committee for a representative of the merged credit union.

Read the letter.

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