NCUA Appears Open to Additional, Specific Conversion Disclosures

ALEXANDRIA, Va. - NCUA appeared open to requiring credit unions seeking to convert to mutual bank charters to disclose the names of the recipients of funds it is spending on the conversion effort as well as whether any of the consultants the credit union is using has opened up accounts at the credit union. The version of the conversion rule that the agency approved on Jan. 13 includes a provision requiring credit unions seeking charter change to disclose what they estimate spending on the effort by category. But the agency signaled in its Board Action Memorandum accompanying the rule that it is open to going further. "NCUA also believes the suggestion that NCUA require a converting credit union to identify by name the recipients of expenditures as part of a detailed itemization of costs is worthy of further consideration," the agency wrote in the BAM. "That requirement, however, as well as disclosure of the accountholder status of paid consultants and service providers, are beyond the scope of the proposal and are not adopted in this final rule." Meanwhile, more reaction to the NCUA role continued to trickle in. The Independent Community Bankers accused the NCUA of trying to block credit unions from converting to mutual banks with its most recent conversion disclosure rule. "These disclosure and voting requirements are just another attempt to obstruct the right of a credit union to convert to a mutual savings bank charter," said Camden R. Fine, ICBA CEO. "They are so misleading and slanted that one can only assume that NCUA is trying to discourage credit union members from ever voting for a conversion." For its part NASCUS also weighed in, praising the rule overall but still expressing some disappointment. NASCUS regretted the agency not mandating that a converting credit union use an accounting firm with whom it does not have an existing relationship to conduct the vote. "Allowing a CPA firm not on record with the credit union to conduct the vote provides such impartiality and flexibility while accomplishing the same result, potentially in a less costly manner," wrote the association of state credit union supervisors.