NCUA to Consider Executive Compensation Rule
The NCUA is scheduled to discuss and possibly send out for comment at next Thursday's meeting a proposed multiple agency rule to provide additional regulation of executive compensation.
The rule, which was required by the financial overhaul bill passed by Congress last year, mandates the reporting of compensation packages to the financial institutions' regulator and would places limits on certain kinds of incentive-based compensation.
The FDIC on Monday voted to send out the rule for comment. Seven government regulators must issue drafts and send them out for comment. According to the FDIC summary, the rule "would prohibit a covered financial institution from establishing or maintaining any incentive-based compensation arrangements for covered persons that encourage inappropriate risks by the covered financial institution that could lead to a material financial loss.''
Some credit unions and their advocates have expressed concern that the rule would make it harder for credit unions to compete with banks for top candidates.
NAFCU President/CEO Fred Becker wrote the agency today that the association fears when the NCUA issues its rule on Thursday it will create a different standard for credit unions because this would "have a serious impact on credit unions being able to attract qualified management.''
The board is also scheduled to discuss and vote on new corporate credit union chartering guidelines. The proposed rule stated that the persons applying for a charter must be "competent, experienced, honest and of good character.''
The agency's proposal requires that at least seven people submit the charter application, and they must demonstrate that there is a "sufficient customer base," as evidenced by surveys or written comments. The applicants would also be required to present a business plan that covered items such as written policies for shares, lending and funds management.
The board is also scheduled to hear a report on the health of the NCUSIF.
The meeting is scheduled to be held at 10:00 a.m. at the agency's headquarters in Alexandria, Va.