WASHINGTON (4/17/08)—-The Credit Union National Association (CUNA) is asking credit unions to comment on a federal regulatory proposal designed to clarify a law that bans dishonest persons from working at credit unions. It requested comments by May 22. The proposed rule by the National Credit Union Administration (NCUA) seeks to explain more precisely the meaning of a section of the Federal Credit Union Act intended to accomplish that objective The relevant section now prohibits from participating in the affairs of a credit union, persons convicted of a criminal offense involving dishonesty, or breach of trust, or who have entered into a pretrial diversion or similar program, unless given a special waiver by the board. The NCUA’s clarification, in the form of an Interpretive Ruling and Policy Statement, would exclude certain minor offenses, juvenile offenses, and expunged convictions, while also prohibiting NCUA from providing consent to those individuals who have engaged in certain other criminal offenses. The proposed policy statement was adopted on March 20. The board requested comments by June 3. NCUA’s interpretation would establish specific procedures credit unions must follow in order to achieve NCUA consent to waive the prohibitions in the law for an individual. These include:
* The credit union must explain the circumstances surrounding the conviction or pre-trial diversion program, and evidence of rehabilitation; * It must demonstrate that the individual is fit to participate in the credit union affairs without posing a safety and soundness risk; and * If the NCUA consent is denied, the credit union may appeal the decision within 30 days.