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PRINCIPLES REGARDING CREDIT UNION CONVERSIONS Adopted by CUNA Board of Directors June 16, 2005 CUNA fully accepts its responsibility to protect and advance the cooperative structure of the U.S. Credit Union movement. Specifically, regarding credit union conversions: * We support the right of member/owners to exercise their democratic control of their credit unions. * The credit union charter currently provides the best vehicle for serving the financial needs of consumers. * CUNA encourages credit unions that are considering conversions to make their decisions based solely on the best interests of their members. * Full, plain language, disclosures are essential to furthering the democratic process. * Credit union directors and managers have a fiduciary responsibility to present objective and honest information as well as reasonable business alternatives (e.g. mergers, liquidations) * We believe that the net worth of the credit union belongs to the members and should remain with them. There should be no unjust enrichment to Directors and senior management upon later conversion to a bank. * CUNA supports NCUA and state regulators in the full use of their current authority to ensure members understand the conversion process and that fiduciary duties of credit union boards are fully enforced. To further these principles, the Board is directing CUNA to: * Support and advocate the strongest possible federal and state charter enhancements for credit unions. * Work with NCUA and state regulators to ensure that their current statutory authority is fully used. * Act as the leading “Public Advocate” for the cooperative structure of credit unions, including the promotion of the “America’s Credit Unions” philosophy * Take steps to help Credit Unions educate their members about the credit union difference, including members’ ownership rights and the cooperative structure of the Credit Union System * Seek ways to eliminate “unjust enrichment” in conversions.

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