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The NCUA Board on Thursday issued a proposal addressing emergency mergers carried out by the agency. It would amend the definition of "in danger of insolvency" in the agency's chartering and field-of-membership manual.

Under the current requirements, credit unions must fall into a least one of three net worth categories over a certain period of time in order to be "in danger of insolvency." This new proposal, for two of the three categories, would lengthen by six months the timeframe the NCUA has to forecast a credit union's future insolvency when a predictive assessment of the credit union's declining net worth is in play.

As a result, the NCUA would review whether a credit union's net worth is expected to decline to the point insolvency within 30 months (currently 24), and also review whether a credit union's net worth is expected to fall below 2 percent within 18 months (currently 12).

This proposal would also add a fourth category to the "in danger of insolvency" definition. This new element of the definition would provide that credit unions are in danger of insolvency if they have been granted or received assistance under section 208 of the Federal Credit Union Act in the 15 months prior to the NCUA region's determination that the credit union is "in danger of insolvency."

Once published in the Federal Register, the proposal will have a 60-day comment period.