Credit Union Auckland and FCU Proposed Transfer of Engagements

Credit Union Auckland and FCU Proposed Transfer of Engagements

Credit Union Auckland Incorporated (CUA) proposes to transfer its engagements (Transfer of Engagements) to First Credit Union Incorporated (First) in accordance with section 135(3) of the Friendly Societies and Credit Unions Act 1982 (FSCU Act).

Under the Transfer of Engagements, it is proposed that First will undertake to fulfil all engagements of CUA, by succeeding to all of the assets, property, rights, powers, and privileges of CUA, together with all liabilities and obligations of CUA. The Transfer of Engagements is similar to a merger between CUA and First.

As a small financial entity, CUA has been finding it difficult to compete due to relatively higher costs to meet and deliver services and, in recent years, the increased cost of compliance. The Transfer of Engagements has been proposed to a larger, more resilient credit union to secure the future of CUA members’ credit union membership. First and CUA have a similar vision to continue to develop a strong, competitive and sustainable sector that delivers on its purpose of ‘people helping people’ across New Zealand.

It is proposed that members of CUA will vote on the Transfer of Engagements at the Special General Meeting on Thursday 18 April 2024. If approved, the Transfer of Engagements will be subject to the further approval of the board of First and will remain subject to other conditions.

If the Transfer of Engagements is approved by members of CUA by way of special resolution and the Transfer of Engagements becomes unconditional, the special resolution will be filed with the Registrar of Friendly Societies and Credit Unions (Registrar) pursuant to sections 135C(1) and 82(3) of the FSCU Act. Under section 82(4) of the FSCU Act, a period of six weeks is then allowed for objections to be made in respect of the Transfer of Engagements.

It is anticipated that the Transfer of Engagements will take effect on or around 1 June 2024.

The most recent Product Disclosure Statements and audited financial statements for CUA and First may be obtained online by accessing the Disclose register www.disclose-register.companiesoffice.govt.nz (using the “Search for an Offer” function).

Further information may be obtained by contacting welcome@firstcu.co.nz or by calling 07 834 4810.

  • A transfer of engagements is a legal process whereby all assets, liabilities, and undertakings of one or more credit unions are transferred to another credit union – it is similar to a merger. In this case, we are proposing that all of CUA’s assets, liabilities, and undertakings will be transferred to First. This means that members of CUA will become members of First. 

  • A memorandum of understanding was signed between CUA and First on 27 February 2024. The memorandum of understanding sets out the terms of the transfer of engagements and steps to complete it. The transfer of engagements is conditional on a number of matters, including approval by CUA’s members.

    If CUA members vote in favour, First's Board will need to provide final approval of the transfer of engagements. It is expected this will occur, as First has given its commitment to the transfer.

    Following the approval of the transfer of engagements by members and First's Board, a mandatory six-week period to allow for objections is required under the Friendly Societies and Credit Unions Act 1982. Certain other legal formalities must also be met.

    If all approvals are received, it is anticipated that the transfer of engagements will take effect on or around 1 June 2024.