An NCUA proposal to encourage non-federally insured credit unions to pay into the Temporary Corporate Credit Union Stabilization Fund violates a federal statute banning extortion by government employees, according to a comment letter filed on behalf by American Share Insurance.
"There is nothing 'voluntary' about a payment that is conditioned upon a threat," wrote Steven W. Tigges, a Columbus, Ohio-based lawyer representing ASI.
He cited a 1947 federal appeals court decision in saying that such a provision would amount to "an oppressive use of official position" to force non-federally insured credit unions to "part with something of value unwillingly and involuntarily."
The comment letters reflected widespread objection to the NCUA's proposal to allow corporates to encourage non-federally insured members to pay a fee or be faced with a vote to be expelled.
In an interview with Credit Union Times last month, NCUA Board Member Gigi Hyland said that proposal "troubles me." The other two board members haven't publicly commented on that provision.