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NCUA to look at fiduciary clarifications more
ALEXANDRIA, Va. (1/24/08)--The National Credit Union Administration (NCUA) is scheduled today to take up its rules related to credit union board fiduciary responsibilities at its monthly board meeting. The federal regulator is expected to issue an advance notice of proposed rulemaking intended to more clearly define a board’s fiduciary duties in the face of major decisions, such as mergers or conversions to mutual thrifts. The proposal would seek to amend Parts 708a and 708b of NCUA's "Rules and Regulations--Mergers, Conversion from Credit Union Charter, and Account Insurance Termination." The agency will seek comments. Also on the agenda, the board will evaluate credit unions' federal usury rate ceiling, which the Federal Credit Union Act requires every 18 months. The rate currently is set at 18%. As is routine, the open board meeting will be followed by a closed session. Observers of acquisition efforts by three Colorado credit unions for Norlarco CU of Fort Collins will be watching to see if the agency uses the session to act on bids. John McKechnie, NCUA director of public and congressional affairs, would not confirm a date for a bid decision and would not identify items to be addressed at the closed NCUA meeting. Norlarco was placed into conservatorship by Colorado state regulators in May after a number of its construction loans issued in Lee County, Fla., became delinquent. In July, the NCUA took control of the credit union and removed its board of directors. The NCUA has never identified the bidding organizations. However, Ent FCU, a $2.292 billion-asset Colorado Springs-based institution, has confirmed it is one of three credit unions interested in purchasing Norlarco. The others were identified by the Nov. 27 issue of The Coloradoan newspaper as Bellco CU, Greenwood Village; and Public Service Employees CU, Denver. The NCUA had expected to approve a purchase-and-assumption agreement for Norlarco by the end of last year, according to a letter to credit union members posted in November on the Norlarco website. However, despite the agency’s desire to approve a successful resolution as soon as possible, broader market conditions have made it a longer process than at first expected, according to a source close to the situation. Service to Norlarco members has continued uninterrupted.


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