What's more, the second half of the year is getting off to a slow start. In July, the NCUA approved only 11 mergers. That's down from 14 approved consolidations in July 2016, 22 in 2015, 25 in 2014, 23 in 2013 and 24 in 2012.

If this year's slow merger pace continues through the second half of the year, less than 200 consolidations could be approved by the end of December.

In most years over the last two decades from 1997 to 2016, the number of mergers has ranged from about 225 to 325, which has lowered the number of credit unions from 11,659 in 1997 to 6,022 in 2016. In the last eight years, however, the number of mergers has been gradually declining closer to the low 200s. In 2016, the NCUA approved 207 voluntary mergers, down from the 265 in 2012. And in 2011, the federal agency approved 212 voluntary consolidations, 193 in 2010 and 207 in 2009.

"If you actually look at the merger numbers in proportion to the number of credit unions that exist today, even though the overall merger numbers are floating down to about the 200 level, proportionally over the last 20 years you're seeing an uptick in merger activity. That's because we've essentially cut in half the number of credit unions over the last 20 years but we've only cut the number of mergers by approximately a third," explained Timothy I. Oppelt, a law partner at Styskal, Wiese & Melchione LLP.

His Glendale, Calif., law firm works on many credit union mergers across the state. Oppelt has seen no reduction in the number of consolidation deals.

But professionals who serve the credit union industry and credit union executives are worried the new merger rules as proposed by the NCUA board could delay or prolong mergers or perhaps even discourage some consolidations, which could ultimately harm the movement.

In May, the NCUA board introduced new regulations that they say would provide more disclosures, more communication and more transparency for members about merger deals.

In its draft proposal, the NCUA said recent merger trends suggest some credit unions may be offering financial incentives to top executives and other highly compensated employees of merging federal credit unions that should be disclosed to members. But the board offered little evidence that this was a prevailing problem.

To say the least, the proposed regulations were not well received by many credit union executives.

Among the 81 cooperative organizations and individuals who submitted response letters to the federal agency's call for comments, 51 said they mostly oppose the federal agency's proposals even though they were well intended.

"We are concerned that, while proposed with the best interests of credit union members in mind, the changes may prove unduly burdensome," Zack Fallstich, a staff attorney for the $1.4 billion Advia Credit Union in Parchment, Mich., wrote in his comment letter to the NCUA board. "They may have a chilling effect on merger activity, which may very well be in the best interests of a given credit union's membership."

Michael R. Murphy, president/CEO of the $880 million Andigo Credit Union in Schaumburg, Ill., noted in his letter that the proposed rules would have a negative effect on the willingness of two credit unions to consider a voluntary merger and could stifle some voluntary mergers.

"The result ultimately would be a potential emergency or involuntary merger with potential NCUSIF ramifications," Murphy wrote. "To wait until a credit union is troubled before allowing an emergency or supervisory merge rather than allowing the credit union to negotiate a workable and satisfactory set of merger terms between the fiduciaries of two solidly capitalized credit unions, is not acting in the best interest of the credit unions involved. Neither is it in the best interests of their members or the share insurance fund that might have to cover some losses in a troubled credit union involuntary merger."

Oppelt agreed, saying that if the proposed rules are adopted it would place the NCUA in a position of managing out more small credit unions.

Instead of small credit unions merging at a healthy 6% capital, they would end up needing to do an emergency or involuntary merger when small credit unions may be at 3% or 4% capital. At that point, management and the members of those small credit unions would have no choice in selecting a suitable merger partner.

Julie Blitchok, president/CEO of the $512 million Arbor Financial Credit Union in Kalamazoo, Mich., pointed out that the NCUA's proposals would ultimately hurt credit union members.

"We believe it is over-reaching, creates an unnecessary additional burden on credit unions with little benefit to our membership, and may ultimately discourage mergers when they are a vital part of a credit union's ability to adapt, grow and evolve," Blitchok wrote. "The proposed rule, one could argue, ultimately ends up hurting the very memberships we are here to serve by preventing them access to enhanced technology and valuable products and services that could be the result from a merger."

Gary Grinnell, president/CEO of the $1.3 billion Corning Credit Union in Corning, N.Y., said the perception is that the NCUA is attempting to sabotage all voluntary merger activity. One of the most controversial proposal rule changes would require credit unions to create a new channel for member-to-member communications that would allow members to discuss the merger proposal before voting on the proposed consolidation.

"We urge (the) NCUA to reconsider these proposed procedures as they would allow disgruntled members an unequal and unchecked opportunity to block a merger and would certainly burden credit unions and their members with significant and unnecessary red tape and additional cost," he wrote.

Ironically, the NCUA's proposal to impose more regulations on the merger process is yet another reason why the regulations should not be adopted, some CEOs argue.

"The regulatory climate of today threatens our industry," wrote Roger Heacock, president/CEO of the $1.1 billion Black Hills Federal Credit Union in Rapid City, N.D. "More regulations in response to unethical practices by a few specific credit unions will further encumber the growth of the credit union movement. In visiting with credit unions from across the country, the concern I hear most often is the need for regulatory relief."