DCUC Opposes FDIC Merger Proposal as Drafted, Citing Separate Treatment of Credit Union Buyers
By DCUC Staff —
WASHINGTON, DC – The Defense Credit Union Council (DCUC) opposes finalizing the FDIC’s proposed Merger Transactions rule without revisions addressing its treatment of credit union buyers. DCUC’s position focuses on a separate credit-union service provision, the measurement of competition, and coordination of regulatory reviews, not opposition to every element of merger reform.
“Credit unions are not-for-profit, member-owned cooperatives. That structure is central to our position on bank acquisitions,” says 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 September 17, 2026, 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. The service-review distinction. 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,” says 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 September 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 adds. “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 November 23, 2026. DCUC will monitor the rulemaking and keep its Military Advocacy Committee and credit union leaders informed of material developments.
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Originally reported by DCUC.