Credit Union Services

Luse Gorman is one of the leading law firms for merger and acquisition transactions involving credit unions. Our deep experience means we regularly handle many of the largest, most complicated transactions involving credit unions, including credit union-to-credit union mergers, credit union acquisitions of banks, and credit union acquisitions of fee-based businesses through credit union service organizations (“CUSOs”). Some of our accomplishments include:

• Serving as counsel in the first acquisition of a federal stock bank by a credit union, which expanded opportunities for credit unions and resulted in a number of like transactions;

• Completing more than 40 transactions involving credit union acquisitions of banks, including transactions that have established precedent in certain state jurisdictions; and

• Completing one of the largest credit union mergers based on the net worth of the merging credit union.

Our services include board and management education, drafting and negotiating letter of intents, conducting due diligence, negotiating the terms of the purchase or sale, including any unique purchase price mechanics related to the transaction and the effect of any impermissible assets or deposits of the selling bank, drafting the merger or purchase agreement, resolving executive compensation and employee issues, and preparing regulatory applications for the transaction and any related field of membership expansion that is necessary. As part of our mergers and acquisitions practice, we work closely with financial advisers and accounting firms in selecting acquisition targets and structuring the transaction.

Luse Gorman assists credit unions in raising capital by issuing subordinated debt notes. Our services include board and management education, drafting the debt instrument and other documentation, coordinating the NCUA and state applications and pre-approval process, and facilitating the offering process.

We advise credit unions on corporate power issues, field of membership, member business lending restrictions, new products and services, transactions with affiliates and insiders, branching, and enforcement and USA PATRIOT Act/Bank Secrecy Act matters. We are experienced in working with the NCUA and state regulators throughout the nation.

Luse Gorman has represented credit unions in field of membership matters, including community charter expansions and underserved area expansions, as well as federal-to-state and state-to-federal credit union charter conversions.

We also represent credit unions converting to mutual bank charters. Converting a credit union to a mutual bank charter involves a fundamental change in the organization structure and operations of a credit union and receives close scrutiny by the NCUA and any applicable state credit union regulator. The process of obtaining member approval of a conversion to a mutual bank under NCUA regulations is also challenging, and counsel plays a key role in the strategic planning, applications and approval processes. We oversee the regulatory applications process, including the development of a business plan. We also work closely with our credit union clients on communications with membership and other interested parties during the charter conversion process. Attorneys at Luse Gorman have completed several charter conversions by state or federal credit unions to federal or state savings bank charters.

We advise clients on all facets of credit union service organizations, including organization, corporate structure, joint ventures, review of contracts and similar matters.

We regularly counsel our financial institution clients on board and corporate governance matters, including charters and bylaws, fiduciary duty obligations, conflicts of interest, board procedures, ethics, committee charters, corporate policies, and observance of best practices.

We assist our clients in all aspects of their employee benefits program implementation and administration, including employment contracts, non-qualified deferred compensation plans such as 457(b) and 457(f) plans, executive salary continuation plans and supplemental executive retirement plans (SERPs), and tax-qualified retirement plans such as 401(k) plans and defined benefit pension plans. In addition, we work with credit unions to avoid or reduce the impact of the 21% excise tax imposed on federal and state-chartered credit unions under Section 4960 of the Internal Revenue Code on any excessive compensation paid to certain covered employees of the credit unions. We often been able to help clients make simple adjustments to the design and structure of their benefit arrangements to avoid or mitigate such excise tax.

Our goal is to work with our clients not only by designing and implementing the plans but also by providing advice on an ongoing basis with respect to the federal tax and regulatory requirements of the benefit programs (including the performance of compliance audits to ensure compliance with the complex requirements of the Internal Revenue Code and the Employee Retirement Income Security Act), as well as working with clients during mergers and acquisitions to facilitate the coordination of the benefit programs offered by the unrelated entities.