Clipped wings.

The National Credit Union Administration finally stepped in formally last week to request that Wings Financial Federal Credit Union end its month-long unwanted takeover attempt of El Segundo-based Continental Federal Credit Union. Both are credit unions for airlines and others in the air transportation industry.

The regulator said it reviewed the original offer by Wings to pay members of Continental $200 in cash if it merges with Wings, and informed the Minneapolis institution that such an offer is impermissible under the provisions of the Federal Credit Union Act.

"NCUA has informed Wings that the (Federal Credit Union Act) does not allow per capita dividend payments, and that no other legal authority exists for a federal credit union to make this kind of payment," said a statement issued last week by the regulator. "The unilateral promise of a dividend by the continuing credit union in a proposed merger, without the approval of the merging credit union, is not lawful."

Further, the regulator told Wings that its unorthodox merger campaign as well as its aggressive efforts to sway Continental members after rejection was "troubling" to the industry as a whole. Accordingly, NCUA has formally requested that Wings immediately discontinue any and all overtures regarding a merger with Continental.

Staff reporter Jabulani Leffall can be reached at [e-mail], or at [phone], ext. 228.