NCUA Needs to Improve Emergency Merger Transparency

The National Credit Union Administration (NCUA) needs to improve transparency with regard to emergency merger process.

I am not the only one who believes there is a need for greater transparency.

In fact, the National Association of Federally-Insured Credit Unions (NAFCU) in a 2018 comment letter called on NCUA to increase its transparency with regard to the emergency merger process.

NAFCU wrote:

As part of this process, prospective merger partners should be fully apprised of important information regarding the selection process and should also have the opportunity to make their case for the merger. Additionally, the NCUA should provide prospective merger partners with a written explanation of the reasons for its decision. This would help increase transparency in the entire emergency merger process and help guide future emergency mergers.

For example, how did NCUA select Pentagon Federal Credit Union (McLean, VA) as the emergency merger partner for Progressive Credit Union (New York, NY), which was in danger of insolvency?

CU Today, a credit union trade publication, noted there were other credit unions that expressed interest in possibly acquiring Progressive. Why were these credit unions not selected, especially if they were headquartered in New York?

The agency's Inspector General should evaluate NCUA's emergency merger process and make recommendations on how to improve it and make it more transparent.

The Inspector General should also examine NCUA's decision to name Pentagon Federal Credit Union as the merger partner for Progressive.