ALEXANDRIA, Va. -- NCUA released a legal opinion letter(07-0627) last week clarifying the member-to-member communicationprovisions in the updated mutual savings bank conversion rule foran attorney at Silver, Freedman & Taff, LLP, which assists inthese conversions.

NCUA Associate General Counsel Sheila Albin told the firm that,generally speaking, if a member has provided the credit union ane-mail address, it "must assume the member has consented to receiveconversion-related member-to-member communications electronicallyfrom the credit union."

She continued, "When NCUA revised its MSB conversion rule inDecember 2006, one purpose of the revision was to improve the flowof information between members on a pending conversion proposal andassociated member vote. Toward that end, the rule includes aprocedure to facilitate communications between members, through thecredit union, as the members prepare to vote."

Under the updated rule, a member may ask the credit union tocommunicate with the other members provided the member pays for thecommunications. The credit union must let all the members know howmany members there are and how many accept electroniccommunications as part of its 90-day notice of conversion.

"Our view is, if a member has provided his or her e-mail addressto the credit union for any purpose, the credit union must assumethe member has agreed to accept conversion-related communicationselectronically unless the credit union has specific evidence amember does not want to receive conversion-related communicationselectronically," Albin wrote. "This view facilitates themember-to-member contact intended by the rule."

She added, in response to a question from the firm, thatelectronic disclosure requirements under Truth-in-Savings andE-SIGN do not apply in mutual savings bank conversions because theyare not savings or transaction related.

"Finally, we caution credit unions not to impose additionalprocedures in order to hamper member-to-member communications orengage in any activity encouraging members to restrict theircommunications with other members under the MSB conversion rule,"she warned. "For example, credit unions should not amend current,standard consent agreements or forms that expressly allow certainelectronic communications with the credit union so as to restrictconversion-related member-to-member communications."

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