ALEXANDRIA, Va. — NCUA issued a legal opinion letter statingthat the Federal Credit Union Act trumps Virginia law when it comesto a federal credit union's dividend and fee practices regardingdormant accounts.

NCUA legal opinion letter (06-1214) pre-empted Virginia'sDivision of Unclaimed Property objection to a federal credit unionretroactively waiving account fees or reinstates dividendspreviously unpaid because of an inactive status. “NCUA'slongstanding position is that a state law, which attempts to governan FCU's imposition of account fees and charges, including inactiveor dormant accounts, directly conflicts with ?107(6) of the FederalCredit Union Act (FCUA) and ?701.35 of NCUA regulations and ispreempted by federal law,” the letter read. NCUA noted that it hadpre-empted an earlier version of this same law.

Additionally, the letter explained, “The FCUA grants FCUsexclusive authority to determine terms, rates and conditions formember share accounts except as limited by the NCUA Board. NCUAregulations state: