CUNA Comment Letter

Troubled or Newly Chartered Credit Unions

February 3, 1999

Ms. Becky Baker
Secretary to the Board
National Credit Union Administration
1775 Duke Street
Alexandria, VA 22314-3428

Re: Troubled or Newly Chartered Credit Unions

Dear Ms. Baker:

Credit Union National Association (CUNA) and Affiliates, which represents over 90% of the federal and state chartered credit unions nationwide through state leagues, welcomes the opportunity to comment on NCUA's proposed changes to section 701.14. This section covers a change in an official or senior executive officer in a credit union that is newly chartered or in troubled condition. The proposal was in the November 5 Federal Register.

CUNA supports the clarification in section 701.14(b)(4) that defines a "troubled" corporate credit union to reflect the new rating system for corporates, the Corporate Risk Information System (CRIS). Thus, a corporate that either has a 4 or 5 CAMEL rating or a 4 or 5 CRIS rating or a 4 or 5 CRIS rating based on core exam workpapers is in troubled condition.

CUNA also supports the change to section 701.14(d)(1) which states that when a newly chartered or troubled corporate credit union files a notice with NCUA about a change in an official or senior executive office that notice must be filed with NCUA's Director of the Office of Corporate Credit Unions (OCCU).

CUNA, however, does not support the time frames connected with processing the notice as set out in section 701.14(d)(1). According to that time frame, after the credit union files the notice with the appropriate Regional Director (RD) or with the Director of OCCU,

Thus, the credit union could wait as long as 44 calendar days after a request was received by NCUA before knowing whether the individual was approved or disapproved.

We believe that the agency should make troubled or newly chartered credit unions and their members a very high priority. Any delay for a newly chartered credit union could cause a diminution in its momentum and focus, and a trouble credit union needs to be able to respond quickly to the concerns that need to be addressed. Therefore, we believe that this proposed time frame can and should be shortened. We recommend that the final regulation give the RD or Director only 5 business days to determine if the notice is complete or if additional information is needed. In addition, we suggest that the agency review the current 30 calendar days time frame for the approval or disapproval to see if it can be shortened and thus come within the statutory "…30-day period beginning on the date the agency receives notice of the proposed action…" (12 USC 1790a(b)) This statutory 30-day limitation does not indicate that the agency is to be given additional time to determine if the notice is compete.

We appreciate this opportunity to comment on the proposal.

Sincerely yours,

Sarah Cummer
Regulatory Affairs Counsel