Removing Barriers Blog

NCUA Issues Final Rule to Amend Part 709
Posted May 30, 2018 by CUNA Advocacy

The NCUA Board issued a final rule to amend part 709 to update and clarify the procedures that apply to claims administration for federally insured credit unions that enter involuntary liquidation. The rule permits employees of an insolvent credit union subject to involuntary liquidation by NCUA to receive compensation earned in accordance with their contractual employment agreements. Compensation would include accrued but unpaid sick and vacation leave, as well as any severance to which the employee was entitled, provided such terms were documented and objectively-applied. Under prior law, employee claims regarding compensation for work performed and accrued while in liquidation were assigned secondary priority, subordinate among unsecured creditor claims. 

CUNA appreciates NCUA adopting this technical correction, consistent with the NCUA’s golden parachute provisions.