DCUC Pushes Back On FDIC Merger Rule’s Treatment Of CU Buyers
By CU Today Staff —
WASHINGTON--The Defense Credit Union Council said it opposes finalizing the FDIC’s proposed Merger Transactions rule without revisions to how it treats credit union buyers. DCUC’s concerns center on the proposal’s separate credit union service provision, how competition is measured and coordination among regulators reviewing transactions, rather than opposition to the broader merger reforms.
“Credit unions are not-for-profit, member-owned cooperatives. That structure is central to our position on bank acquisitions,” said Anthony Hernandez, DCUC president/CEO, ret. U.S. Air Force Colonel. “Our objection concerns the separate treatment of credit union buyers, not the requirement to examine financial strength, service continuity and community needs.”
The FDIC board approved the proposal on Sept. 17 and it was published on September 22. The agency describes its objective as faster, more predictable merger reviews. The proposal is not a final rule.
Proposed § 333.5(e)(2)(ii) separately identifies reductions in products and services in bank-to-credit-union transactions. The accompanying explanation says those reductions would weigh negatively. The broader framework also examines service changes in other mergers; the separate provision is not an automatic prohibition.
DCUC’s position calls for replacing that provision with a standard addressing material community effects across transactions. That assessment would consider who uses an affected service, available alternatives, affordability, transition arrangements and the transaction’s benefits and risks. DCUC is not seeking automatic approval or an exemption from consumer protections.
Competition Data And Coordinated Review
For credit unions with branches inside and outside a market, the proposal generally allocates shares equally among branches. DCUC’s position seeks "reliable corrective evidence," including membership geography and practical access. It also seeks clarification of how NCUA approvals and supervisory findings would fit into FDIC review procedures, without removing either agency’s responsibilities.
Bank sellers remain part of the discussion. NCUA describes these transactions as voluntary, regulated purchases of assets and assumptions of liabilities, not purchases of bank charters. Applicable approvals remain necessary. Membership eligibility, financial capacity and account-insurance arrangements are among the matters that require attention.
“There is an irony here. Credit union advocates are defending a bank’s ability to consider the best qualified offer, including a credit union offer, while ICBA is campaigning against that option,” said Jason Stverak, DCUC chief advocacy officer. “We’ve highlighted how ICBA’s membership-dues incentives help explain that position. Protecting an association’s dues base is not the same as representing a bank that has decided a credit union offer merits consideration.”
The banking trades’ positions are not identical. The American Bankers Association welcomed the Sept. 17 proposal, citing modernization of competition guidelines. DCUC’s objections focus on specific credit-union provisions and implementation questions, rather than treating support for faster reviews as opposition to credit unions.
“Families do not experience a merger as a regulatory filing. They experience it when they deposit a paycheck, seek a loan, or ask for help,” Hernandez added. “For DCUC, member ownership and the actual services available after closing are central to understanding a transaction’s impact. That includes servicemembers, veterans and families managing finances through a deployment or relocation.”
The proposal does not ban bank sales to credit unions or impose an exit fee. Comments on RIN 3064-AG18 are due Nov. 23, 2026. DCUC will monitor the rulemaking and keep its Military Advocacy Committee and credit union leaders informed of material developments.
Originally reported by CU Today.