Ban Sought on Insider Enrichment

WASHINGTON – NAFCU called on lawmakers yesterday to bar executives and directors of credit unions converting to banks from profiting from the charter change for up to 10 years. In a letter to members of the House Financial Services Committee, which is drafting legislation to make it tougher to convert, NAFCU also said any benefits earned after that should be disclosed fully to members voting on the proposed conversion. NAFCU’s bid comes as lawmakers are scheduled to meet today to discuss the legislation, part of the CU regulatory Improvements Act. The trade group asked lawmakers to stress full disclosure in whatever they do; to facilitate member review of the conversion; and to require clear and plain language in the disclosures. NAFCU also supported a requirement that a minimum of 20% of members vote on the conversion, down from the 30% now in CURIA.