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How NCUA’s Revised Merger Rule Will Impact Mergers Going Forward

On Oct. 1, the NCUA’s revised merger rule went into effect and with it are several changes to how credit unions engage in the merger process. Specifically, the final rule applies to all federally insured credit unions and includes:

  • A new method for members and other stakeholders to submit comments to the NCUA on the proposed merger;
  • An increase in the minimum required time for the notice to be sent to members before a merger vote to 45 days;
  • A required modification to the bylaws of merging federal credit unions; and
  • A clarification of the contents and format of the member notice.

In this article, we detail these and other provisions of the rule. Additional information about the NCUA’s revised merger rule is available in Letter to Credit Unions, 18-CU-03, “Merger Rule Provisions Including the Member-to-Member (MTM) Communications Process.”

The New Member-to-Member Communications Process

The biggest change to the NCUA’s merger rule is the new method for members and other stakeholders to submit comments on the proposed merger of two federally insured credit unions.

Each federally insured credit union proposing to merge with another federally insured credit union is required to include a statement in its member notice about the availability of a website where members of the merging credit union can share comments or questions with each other about the proposed merger.

That website is located on under our section for credit union resources and expansion. The exact link is

Members may jointly or individually submit comments and attachments about the proposed merger through this website. Each commenter will be requested to provide certain personal information in addition to their comment. The NCUA’s Office of Credit Union Resources and Expansion will then review and post the comment online.

As outlined in the final rule, the NCUA has the right not to post a communication or comment that it reasonably believes:

  • Is false or misleading with respect to any material fact;
  • Omits a material fact necessary to make the statement in the material not false or misleading;
  • Relates to a personal claim or personal grievance, or solicits personal gain or business advantage by or on behalf of any party;
  • Addresses any matter, including a general economic, political, racial, religious, social, or other topic or cause that is not related to the proposed merger; or
  • Directly or indirectly and without expressed factual foundation: Impugns a person’s character, integrity, or reputation;
  • Makes charges concerning improper, illegal, or immoral conduct; or
  • Makes statements impugning the safety and soundness of the credit union.

The New Bylaw Amendment for Federal Credit Unions

The merger rule also requires an update by merging federal credit unions to their bylaws to allow for more time between when the meeting notice is sent to members and the date of the vote on the merger. Members must now receive the notice at least 45 days, but no more than 90 days, prior to the meeting.

Federal credit unions should adopt the needed bylaw change prior to submitting their proposed merger application to the NCUA. The board of directors must document in the credit union’s board minutes the adoption of the new wording for Article IV, Section 2, found below:

  • Section 2. Notice of meetings required. The secretary must give written notice to each member: at least 30 but no more than 75 days before the date of the annual meeting; at least 7 days before the date of any special meeting; and at least 45 but no more than 90 days before the date of any meeting to vote on a merger with another credit union.

For federally insured, state-chartered credit unions, a bylaw change may not be necessary. Questions about such a change should be directed to your respective state supervisory authority.

The New Requirements for the Member Notice

Regardless of the charter type, the member notice must now:

  • Include a link where members can find how and where to submit comments on the proposed merger. That link is;
  • Be emailed to at least 15 days before it is mailed to members; and
  • Be received by the members at least 45, but no more than 90 days before the meeting date of the members of the credit union proposing to merge.
  • Disclose certain merger-related financial arrangements for covered persons, such as board members and members of management.

The New Merger Process

All federally insured credit unions are required to submit their proposed merger application to the NCUA for review and approval. When the NCUA gives a merging federal credit union permission to proceed with its membership vote, the merging credit union must send a copy of its member notice to the NCUA’s Office of Credit Union Resources and Expansion.

When the merging federally insured credit union is state chartered, it must comply with the requirements of its regulator, in addition to applicable requirements of the NCUA’s merger rule. Unless a membership vote is waived under state law, the NCUA must receive a copy of the member notice at least 15 days before any mailing of the notice or the equivalent state document.

Additionally, the revised merger rule requires:

  • A merging credit union to submit any respective board minutes to the NCUA that reference the merger during the 24 months prior to the board of directors of the credit unions approving the merger plan; and
  • Both the merging and continuing credit unions’ presiding board officer and CEO to certify there are no other merger-related financial arrangements other than those disclosed in the notice to the members of the proposed merging credit union.

Questions and Additional Information

For questions on the member-to-member communication process, please contact the Office of Credit Union Resources and Expansion at 703.518.6610 or by email at

For questions about any of the other provisions of the new merger rule, please contact your NCUA Regional Office.

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