Large credit unions exempt from fees, FTC says

<p>WASHINGTON – Large merging credit unions will not have to pay thousands of dollars in fees to the Federal Trade Commission or wait for months for the agency and the Justice Department to review their proposed merger, according to an opinion communicated to CUNA on February 19. The money saving opinion applies to all credit unions with “adjusted assets” of $50 million or less. “Adjusted assets” are the credit union’s assets after subtracting the value of cash and investments, mortgages and leases, other real estate owned and buildings. “This amounts to significant savings for some credit unions,” said CUNA General Counsel Eric Richard. “Additionally, in some cases, the fees associated with this reporting requirement may have discouraged some credit unions from merging, and prevented their members from receiving better or even continued service from their credit union.” The requirement had been in place as part of the Hart-Scott-Rodino Act, a measure designed to check anti-competitive mergers. Under the law, parties to some mergers and acquisitions must notify FTC before consummating the proposed acquisition. Filing of the notifications involves fees ranging from $45,000 to $280,000. There is usually a waiting period as well while FTC and the Justice Department review the proposed merger. The notification came from the FTC at the end of a long series of discussions with CUNA in which CUNA argued that the categories of assets like cash and mortgages should not be considered toward the institution’s total assets. “CUNA’s lawyers and economists provided the FTC with extensive and compelling analyses showing that credit union mergers were extremely unlikely to raise any anti-trust concerns,” Richard said. After the last discussion in December, CUNA wrote the FTC a letter asking the agency to affirm that their understanding of the discussion’s outcome had been correct, according to Pat Keefe, CUNA’s Vice President of Communications. Early in February the FTC contacted CUNA by phone and said that the association’s understanding was correct and that FTC officials had noted their agreement on CUNA’s letter. CUNA then had to file a Freedom of Information Act Request in order to see a copy of the noted letter.</p>