NCUA provides its piece to Mo. CU merger

WASHINGTON (3/26/08)—The National Credit Union Administration (NCUA) granted preliminary approval this week of a voluntary merger between Region River CU, Jefferson City, Mo., and struggling Missouri Farmers Union CU (MFUCU), also of Jefferson City.

The merger is expected to take effect as of April 1.

The merger was approved March 24 by the Missouri Division of Credit Unions "pending the affirmation of the credit union's share insurer, the National Credit Union Administration." The NCUA is the administrator of the National Credit Union Share Insurance Fund.

NCUA spokesman John McKechnie said Wednesday, "We wrote the state yesterday granting them preliminary approval to the proposed merger, subject to satisfaction of any requirements imposed by the state."

The state regulator's short notice of approval in March also noted, "No vote of the membership is required due to the financial condition of the credit union," referring to MFUCU, which has been struggling every quarter through its mere few years of existence.

According to the Missouri Credit Union Association (MCUA), MFUCU, which opened two years ago, reported just $24,380 in net capital on $1.1 million in assets, a 2.2% capital ratio, for year-end 2007.

The credit union, chartered to serve members of the state farmers cooperative, never attracted more than 180 members and had net income of just $7,100 for 2007, after a $16,900 loss the year before, MCUA said in its March 26 CourierNet.

Rick Nichols, River Region president/CEO, told the league that his credit union had been assisting MFUCU since July 2007, "so it's a good fit."

"Their board also wanted to offer their members some services that they wouldn't be able to provide, but that River Region could," he added.