NCUA and Other Regulators Send Compensation Rule for Comment
The NCUA and six other regulatory agencies today sent out for a 45-day comment period proposed rules to limit certain kinds of incentive-based compensation packages.
Large credit unions would have to file an annual report on incentive-based compensation programs and couldn't have any such programs that encourage exposure to inappropriate risks.
Credit unions with $1 billion or more in assets couldn't have programs that might lead to material loss and have to document their compliance procedures.
Credit unions with assets of $10 billion or more would have to meet all those requirements and defer at least 50% of their incentive-based compensation for at least three years and adjust payments to reflect subsequent losses caused by the decisions.
The seven regulators were required by last year’s financial overhaul bill to issue the rules. The NCUA voted on Feb. 17 to send the rules out for comment.
To read the proposed rule, go to: http://www.ncua.gov/GenInfo/BoardandAction/DraftBoardActions/2011/Feb17/Item2b11-0217.pdf