The NCUA told Credit Union Times on Thursday that ithas scrapped a proposal that would require credit unions to reportthe original appointment or election date of directors, a move thatcould have created bad publicity for those with long-tenuredboardmembers.

The proposal was part of a broader package of potential 5300 Call Report changes sent to the U.S. Office of Managementand Budget, said NCUA Public Affairs Specialist John Fairbanks.

However, Fairbanks said that during the public comment periodthe NCUA realized the industry had concerns about the necessity ofthe proposed change.

“We responded by weighing the benefits in light of thoseconcerns. After reviewing the comments, we subsequently determinednot to require directors to enter their date of election,”Fairbanks told Credit Union Times.

CUNA Deputy General Counsel Mary Dunn welcomed the news, sayingthat the rule didn't seem nefarious at face value, but the lack ofexplanation by the NCUA regarding how it would assess the longevityof board members was troubling.

“Without explanation of how it would be used, it's easy to seewhy credit unions would be concerned,” Dunn said. “We think NCUAwas well advised to pull it.”

Olympia, Wash.-based consultant Marvin Umholtz, who works with anumber of credit union boards and often writes about the topic,said the proposed requirement raised a number of relevant questionsregarding the NCUA's potential use of the data, the banking lobby'slikely use of the information, and how that information could“undermine the credit union democracy mythology.”

“Each of these relevant questions would merit significantseparate discussion,” Umholtz said. “At its root the primaryline of questioning is why did the NCUA want this information onthe 5300 Call Report in the first place, did the reporting burdenfor credit unions exceed any tangible benefits, and was the NCUA'ssubsequent decision to back off the information-gathering activityresponsible?”

Umholtz added it would be ludicrous to contend that federalgovernment tracking of a credit union board director's tenure hasany relevance to credit union safety and soundness, the NCUA'sprimary objective.

“It should surprise no one that after reflection, and followinga healthy dose of public criticism, the NCUA determined thatrequiring credit unions to report that information was not such agood idea after all. The agency should be commended forreconsidering and ultimately demonstrating good judgment,” hesaid.