Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

Washington
NCUA seeks comment on CU board fiduciary duties
ALEXANDRIA, Va. (1/25/08)--The National Credit Union Administration (NCUA) is seeking comment as it considers amending its rules to more clearly define a credit union board’s fiduciary duties in the face of major decisions, such as mergers or conversions to mutual thrifts.
Click for slide show[CLICK TO VIEW SLIDESHOW] NCUA Office of General Counsel Staff Attorney Frank Kressman, right, told the three member NCUA board it’s clear that a credit union’s board has a fiduciary duty to members. “What’s not entirely clear is how to measure that duty,” he said. “We don’t have a benchmark.” (Photo provide by CUNA)
At its monthly open board meeting Thursday, the three-member NCUA board agreed to receive comments for 60 days after its advanced noticed of proposed rulemaking (ANPR) is published in the Federal Register, a process which often takes about a week. According to a staff document presented at the meeting, the primary focus of the agency’s possible action is protection of members/ interests in transactions that involve fundamental changes in their ownership or in the structure of their credit union. The ANPR addresses six types of transactions: merger of a federally insured credit union (FICU) into another FICU; merger of such an institution into a privately insured credit union (PICU); conversion of a federally insured state-chartered credit union into a PICU; conversion of a FICU into a mutual savings bank (MSB) merger of a FICU into a financial institution other than a MSB; and conversion of a FICU into a financial institution other than a MSB. The transactions noted above are all legally permissible. However, the NCUA believes its current regulations may not adequately address the issues raised by the various forms of business deals. In its ANPR, the NCUA asks for comment in the following areas:
* Credit union conversion into a financial institution other than an MSB. The agency said it is considering establishing an administrative framework and procedures rather than continue its case-by-case approach, and asks for comment on such things as whether such conversions are beneficial to credit union members; * Issues that affect member interests in restructuring transactions; * Is there a need for a regulation to address the fiduciary obligations a credit union director owes members and/or a need for additional regulatory provisions to guard against insider enrichment; * Communications to members. The NCUA is considering, for instance, a need to specifically state a prohibition against credit union officials stating or implying that the NCUA has endorsed the charter change or accompanying credit union materials; and * Member voting rights, such as the right to request a recount and the use of interim tallies
The Credit Union National Association (CUNA) will be reviewing the ANPR with several of its subcommittees during its Governmental Affairs Conference here in March. Use the resource link below to read the NCUA request for comments.
Other Resources

RSS





print
News Now LiveWire
The U.S. Court of Appeals restored NCUA lawsuit v. Barclays Capital that charged misrepresenting quality of $550M IN RMBS. See News Now Wed.
3 hours ago
Registration is now open for the online livestreaming of @TheNCUA March 19 open board meeting. http://t.co/yOuqdXHlxj
7 hours ago
Registration is now open for online viewing of @TheNCUA's March 19 board meeting. https://t.co/mMZoXSFjMe
7 hours ago
.@CFPB Director Richard Cordray's testimony that he will deliver before the #HFSC this afternoon. http://t.co/NA1aEOPAeh
9 hours ago
Consumer spending flatlines, savings ramp up #Market #NewsNow http://t.co/94kPuBpMRK
9 hours ago