Credit Union Conversions to Mutual Savings Banks
Federation Supports NCUA Review of Conversion; Offers Recommendations to Strengthen Rules
(August 26, 2006 - New York, NY) The growing trend of credit union conversions to mutual savings banks is one that is being increasingly discussed at all levels of the credit union industry. Like some of its peer associations, the National Federation of Community Development Credit Unions (the Federation) has joined the debate, sending a comment letter to the National Credit Union Administration (NCUA) expressing its support for the agency’s review of the Proposed Rule Governing Conversion of Insured Credit Unions to Mutual Savings Banks (12 C.F.R. Part 708a).
“We strongly support NCUA’s efforts to maximize disclosure, clarify procedures, and require clear, unambiguous language in all relevant documents,” read the Federation’s letter. “We agree that the enormous stakes in converting – and in almost all cases, ultimately “demutualizing” a credit union, to the profit of its senior officials – demand a very high standard of oversight by NCUA.”
While commending NCUA for undertaking the review, the Federation also offered ways in which the rules could strengthen disclosure of the leadership’s reasons for converting; foster greater access to conversion documents and information; and simplify voting procedures to expand access to all credit union members.
To read the full comment letter, please click here.