CUNA Regulatory Comment Call
June 25, 2004
Prior Notice for Change in Executive for New or Troubled Credit Unions
(NOT A MAJOR PROPOSAL)
- The National Credit Union Administration proposes to amend the requirement that federally insured credit unions that are newly chartered or troubled file a notice with NCUA prior to adding or replacing a board or committee member or employing or changing the duties of a senior executive officer. The amendment is intended to eliminate inconsistency in the current rule, which allows a senior executive officer to serve temporarily until notified in writing of NCUAs approval or disapproval, but also requires 30 days prior notice to NCUA before the addition of a senior official. The amendment resolves this inconsistency by stating that an officer can begin service after expiration of the 30-day notice period, unless NCUA disapproves the notice before the end of that period.
- Comments are due to CUNA by August 12, 2004, and comments on the proposed rule are due to the NCUA Board on August 30, 2004
Please feel free to fax your responses to CUNA at 202-638-7052; or e-mail them to Associate General Counsel Mary Dunn at firstname.lastname@example.org and to Assistant General Counsel Michelle Profit at email@example.com; or mail them to Mary and Michelle c/o CUNAs Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, D.C. 20004. You may also access the proposed rule here.
The Federal Credit Union Act and NCUAs 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 NCUAs 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 NCUAs 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
- 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 NCUAs approval? Please explain.
- 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.
- Do you have any additional comments on this proposal?
- Please submit your name, address, and phone number.
Eric Richard General Counsel (202) 508-6742 firstname.lastname@example.org |
Mary Mitchell Dunn SVP & Associate General Counsel (202) 508-6736 email@example.com
Jeffrey Bloch Assistant General Counsel (202) 508-6732 firstname.lastname@example.org
Catherine Orr Senior Regulatory Counsel (202) 508-6743 email@example.com