The NCUA should withdraw or delay a proposed rule that would prohibits certain incentive-based compensation packages, most credit unions that weighed in on the regulation said in comments, which were due Friday.
NAFCU President/CEO Dan Berger wrote, echoing many of the comments, "NAFCU urges the National Credit Union Administration and other federal financial regulators to substantially revise this rule in acknowledgement that it should not apply to credit unions, is overly broad, and lacks requisite clarity and guidance for good-faith compliance."
The rule, which all financial regulators were required to issue, prohibits incentive-based compensation arrangements that would encourage inappropriate risks by providing excessive compensation or that could lead to material financial loss. Affected institutions will be required to annually create and retain records documenting the structure of incentive-based compensation arrangements for seven years. Further, the proposal requires board members to provide direct oversight of compensation, including approval of all senior executive compensation plans and any material adjustments.
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