CUNA Regulatory Comment Call


June 25, 2004

Prior Notice for Change in Executive for New or Troubled Credit Unions


(NOT A MAJOR PROPOSAL)

EXECUTIVE SUMMARY

Please feel free to fax your responses to CUNA at 202-638-7052; or e-mail them to Associate General Counsel Mary Dunn at mdunn@cuna.com and to Assistant General Counsel Michelle Profit at mprofit@cuna.com; or mail them to Mary and Michelle c/o CUNA’s Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, D.C. 20004. You may also access the proposed rule here.

DISCUSSION

The Federal Credit Union Act and NCUA’s regulations require newly chartered and troubled credit unions to seek NCUA approval before the appointment or employment of directors and senior management officials.

The one substantive change to the rule would change the time when a newly appointed or employed officer can begin his or her service with the credit union. The current provision states that a proposed director, committee member or senior executive officer may serve temporarily until the credit union and the individual are notified in writing of NCUA’s approval or disapproval. This section is inconsistent with the requirement that a credit union give NCUA prior notice before a board member, committee member or senior executive officer is appointed or employed. In order to eliminate this inconsistency, the NCUA Board proposes to adopt new language that allows service of this official to begin after the expiration of the 30-day comment period or any additional time allowed by regulation. The required notice period may be longer, if NCUA finds that the notice is incomplete and requests more information. Of course, if NCUA disapproves the notice before the end of the period, then the official could not start employment. According to NCUA, this amendment would make NCUA’s rule more consistent with the rules of the other financial regulators.

NCUA periodically reviews and updates its policies and rules, and NCUA made these revisions as part of that process. As a result, the proposal also reorganizes the paragraph structure by moving all the notice requirements into one paragraph and renumbering other provisions.

QUESTIONS REGARDING THE PROPOSAL

  1. Do you support the substantive change to the rule that eliminates the provision which allows a senior official to serve temporarily until the credit union and the individual are notified in writing of NCUA’s approval? Please explain.
















  2. Do you support the new rule that only allows a proposed director, committee member, or senior executive officer to begin service after the end of the 30-day period, when the notice is complete? Please explain.
















  3. Do you have any additional comments on this proposal?
















  4. Please submit your name, address, and phone number.
















Eric Richard • General Counsel • (202) 508-6742 • erichard@cuna.com
Mary Mitchell Dunn • SVP & Associate General Counsel • (202) 508-6736 • mdunn@cuna.com
Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 • jbloch@cuna.com
Catherine Orr • Senior Regulatory Counsel • (202) 508-6743 • corr@cuna.com