CUNA Regulatory Comment Call
August 4, 2005
Post-Employment Restrictions for Certain NCUA Examiners
- NCUA has issued a proposal to add a new part to NCUA rules to be titled Post- Employment Restrictions for Certain NCUA Examiners (Part 796).
- Under the Intelligence Reform Act, enacted in December 2004, NCUA must issue regulations implementing new post-employment restrictions for certain examiners and consult with the federal banking agencies that are required to issue similar rules for bank examiners.
- Called the Riggs Bank rule at the Board meeting in which the Board decided to issue this proposal, it would prohibit an NCUA officer or employee who serves as a senior examiner of a federally insured credit union for two or more months during their last 12 months of employment with NCUA from accepting employment with that credit union for one year after leaving NCUA employment.
- Under the proposal, an examiner would be considered a senior examiner if he/she: has continuing, broad responsibility for examination of that credit union; routinely interacts with officers or employees of the credit unions; and devotes a substantial period to time to examining or supervising that credit union, which is determined on a case-by-case basis.
- NCUA anticipates that, with the exception of specialty examiners such as corporate examiners or problem case officers, very few of its examiners will be subject to the rules restrictions. Most NCUA examiners in charge will not be covered by the rule because they examine multiple federally insured credit unions in a year and, therefore, typically do not develop a sustained or meaningful relationship with any one credit union.
- Former NCUA employees covered by the rule may not accept compensation as an employee, officer, director or consultant from a credit union for which he/she served as senior examiner in two of the last twelve months of his/her NCUA employment. The term consultant is defined to include an individual who works directly on matters for, or on behalf of, a federally insured credit union. According to NCUAs interpretation, a former senior examiner may not join a consulting group and accept an assignment directly for a relevant credit union. A former senior examiner, however, may join a consulting firm as long as he/she does not participate in a matter involving a relevant credit union.
- Effective December 17, 2005, a former senior NCUA examiner who violates the rule can be barred by NCUA from participation with that credit union or any federally insured credit union for up to five years. Alternatively or in addition, that senior examiner may be assessed a civil monetary penalty of up to $250,000.
- The NCUA Board may grant waivers if the NCUA Chairman certified that granting the waiver would not affect the integrity of the agencys supervisory program. NCUA expects waivers would be granted in only highly unusual circumstances.
- Comments are due to NCUA by September 27, 2005. Please send your comments to CUNA by September 13, 2005. Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Associate General Counsel Mary Dunn at firstname.lastname@example.org or to Senior Regulatory Counsel Catherine Orr at email@example.com; or mail them to Mary or Catherine in c/o CUNA's Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, 6th Floor - South Building, Washington, DC 20004. You may also contact us at 800-356-9655, ext. 6743, if you would like a copy of the proposal, or you may access it here.
QUESTIONS REGARDING THE PROPOSAL
- Do you agree with the definition of senior examiner as set forth in the proposal (is it
too broad or too narrow)?
Yes ___ No___
If no, how would you define senior examiner differently?
- Do you agree with the duration of the prohibition period -- one year after leaving
Yes ___ No___
If no, what length of time do you feel would be appropriate?
- Is the meaning of consultant sufficiently clear in the proposal?
Yes ___ No___
If no, how should the definition be worded to make it clearer?
- Are there other terms in the proposal that need to be defined?
Yes ___ No___
If yes, what are those terms and how should they be defined?
- Other comments?
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
Lilly Thomas Assistant General Counsel (202) 508-6733 email@example.com
Catherine Orr Senior Regulatory Counsel (202) 508-6743 firstname.lastname@example.org