Restricting credit unions to one corporate credit union and requiring boards to disclose more information about their votes aren’t issues that the NCUA should regulate with regards to state-chartered credit unions.
Those are among the points made by NASCUS Senior Vice President and General Counsel Brian Knight in the group’s comment letter on the NCUA’s latest proposed rule on corporate credit unions.
He noted that “state law has long controlled state-charted credit union investments.” In addition, he wrote that the proposal would “encourage concentration of the natural person credit union’s exposure to the corporate [credit union]. It would also limit the ability of many natural person credit unions to make business decisions to address changing needs.”
Knight also wrote that the provision requiring all board votes to be recorded and the identification of all board members’ votes is an example of the NCUA encroaching into what has traditionally been a matter for state regulators.
He also wrote that the proposed requirement for corporate credit unions and CUSOs to issue combined corporate compensation disclosures could “serve as evidence to pierce the corporate veil and inadvertently expose the corporate to the liabilities of its CUSO.”