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NCUA agenda focuses on exec comp corp. stabilization
ALEXANDRIA, Va. (5/16/11)--Two items of particular interest to credit unions – so-called “golden parachutes” and indemnification payments and the potential for voluntary prepayment of stabilization fund assessments – are on the agenda for the National Credit Union Administration’s May open meeting. The meeting will take place Thursday at 10:00 A.M. ET. The NCUA’s final rule would implement a prohibition on golden parachute arrangements and indemnification payments in certain circumstances. Under the proposal, indemnification payment limits would only apply to proceedings brought by NCUA or a state regulator where the wrong-doer was assessed a civil money penalty, removed from office or subjected to a cease and desist order. The prohibition would not apply to qualified pension plans, "bona fide" deferred compensation, and some other types of employee benefits and severance agreements, and would not apply to current employment contracts, only to those that are agreed to or renewed after the rules take effect. The golden parachute provisions would apply if the credit union is in insolvent, in conservatorship, has a CAMEL 4 or 5 rating or is otherwise in “troubled condition.” The Credit Union National Association (CUNA) has said that it "cannot support proposals that do not provide proper safeguards for credit union officials who strive to fulfill their duties and serve their credit unions well.” These proposals were released in September of 2010. CUNA following the release said that it was "generally concerned that the scope of the proposal is too far-reaching and will have a chilling effect on the ability of credit unions to attract management personnel and board members." Potential voluntary prepayment of Corporate Credit Union Stabilization Fund assessments will also be covered during the meeting, and CUNA has discussed how this could be achieved with the NCUA after several credit unions told CUNA they would welcome the option of early payments. A proposed rule related to the NCUA’s Community Development Revolving Loan Fund, as well as final rules addressing the accuracy of advertising and insured status notices and the NCUA’s share insurance, are also on the agenda. The NCUA's monthly report on the status of its insurance funds will also be delivered during the meeting. A closed NCUA session will follow the open meeting. Insurance appeals and supervisory matters will be discussed during the closed meeting. For the full NCUA meeting agenda, use the resource link.
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