In issuing the proposed rules, the NCUA board said that the credit union industry is experiencing a period of significant consolidation, but called it a "natural part of the business cycle."

But while there has been some industry consolidation, the number of mergers is dropping. The NCUA approved 44 mergers in the first quarter of 2017, down from the 54 mergers approved at the end of last year's first quarter.

That continues a trend over the past few years, with the number of mergers declining. In 2016, the NCUA approved 200 consolidations, down from 238 in 2015, 262 in 2014 and 258 in 2013.

Nonetheless, the NCUA board, in issuing the rules, said it saw some troubling signs in recent mergers.

The board warned that "Recent merger trends in the credit union industry, however, suggest that some prospective merger partners may be seeking to influence the merging credit union by offering financial incentives to management and certain highly compensated employees to support the merger that the Board believes should be disclosed to members."

The new rules seek to address that problem, and others, the board said. Specifically, the proposed rules would:

• Increase the time for notice to members before a merger vote to at least 45 days;

• Require the merging credit unions to disclose all merger-related compensation for certain officers and employees;

• Clarify the content and format of the required members' notice; and

• Create a member-to-member communication process that is similar to the NCUA's regulations governing credit union conversions or mergers with banks.

The three credit union trade groups said they are still reviewing the proposal and soliciting comments from their members. After that, they will encourage members to comment on the rules and submit reactions of their own.

They all said they support a transparent merger system, but added that they are troubled by parts of the proposal.

Price said the rules take a "cookie-cutter" approach, adding that no two mergers are ever the same. Most mergers are routine, he said, adding that the problems cited by the board in justifying the need for the new rules are "anomalies."

He said it is unclear how the member communication process will work, adding that the expanded compensation reporting may actually be capturing too many people.

Hunt said NAFCU wants to ensure that there are no unnecessary roadblocks put in the way of mergers that should be approved.

She said there can be a difference between what appears possible from a public policy standpoint and what occurs in mergers. NAFCU wants to make sure that whatever NCUA implements does not create added regulatory burdens, adding that there are issues that can be addressed outside the regulatory regime.

Ito was clear that when it comes to federally-insured, state-chartered credit unions, state regulatory bodies should be the agencies reviewing mergers.

"Our view is that state supervisors have the right to determine what works best for credit unions in their states, particularly with regard to deciding the appropriateness of whether … disclosures are necessary in the case of business decisions by the credit union," she said. "This is the very essence of the strength of the dual chartering system: That each system is free to make the decisions it needs to make in order to strengthen and support its respective charters, maintaining a healthy competition between the two that ultimately benefits members."

Ito said that while some state supervisors may share the NCUA's concerns about transparency and member interests, states may also view this as a credit union governance issue, rather than an insurance matter.

"Under this view, application of merger rules should properly be left to state supervisors to decide as the chartering agency of state-chartered credit unions," she added.