ALEXANDRIA, Va. (6/20/14)--Federal credit unions seeking to voluntarily liquidate will face less of an administrative burden after the National Credit Union Administration board passed a final rule Thursday. The rule, first proposed in February, is the first revision of voluntarily liquidation procedures since 1993.
"We are not encouraging more credit unions to liquidate, we want to be clear about that," said NCUA Board Chair Debbie Matz. "Voluntary liquidation is a path credit unions may choose, an option that is open in certain circumstances. In those circumstances, we want to make the process as orderly as possible ... For any credit union that chooses to liquidate, this rule will reduce administrative burden while making sure every member receives their insured funds."
The final rule clarifies the existing calculation of pro rata distributions to members, which will be calculated from either the date the credit union board votes for liquidation, or from the date of the last share draft, whichever is later.
It also requires that preliminary pro rata distributions to members be limited to the applicable National Credit Union Share Insurance Fund insured amount.
The rule contains several additions designed to allow voluntarily liquidating federal credit unions use technology in the process by permitting those institutions to publish required creditor notices in either electronic media or newspapers of general circulation.
Federal credit unions are also enabled to issue share payouts to members through electronic payments.
In addition, the rule increases the asset-size threshold for requiring multiple creditor notices to $50 million from $5 million.
The final rule will be effective 30 days after it is published in the Federal Register.
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