Corporate Prepayment Plan Unveiled by NCUA Board
ALEXANDRIA, Va. — Credit unions could prepay between $10,000 and 36 basis points of insured shares toward their assessments to pay the costs of the rescue of corporate credit unions under a proposal announced at the May 19 NCUA board meeting.
Under the plan, credit unions wouldn't earn any interest, and the total collected in prepayments would have to be at least $300 million for the program to take effect.
Deferred compensation and retirement benefits would be allowed, and credit unions could still take out liability insurance for executives and volunteers.
Exceptions can be made if a credit union gets permission from its state or federal regulator or it uses a golden parachute to hire new executives to bring it back to sound financial health. And a credit union could offer “reasonable severance payments” if an executive were losing his or her job as a result of an unassisted merger.