Community CU Appeals NCUA Ruling OnConversion Bid

Register now

PLANO, Texas - (05/24/05) -- Attorneys representing Community CUare challenging NCUA's ruling of last week that more than 450,000ballots the credit union giant mailed on its conversion to mutualsavings bank are invalidate and will have to be done over. In aletter sent to executives of the $1.4 billion credit union NCUAsaid the credit union's answers to required disclosures on membervoting rights, ownership and directors and officers financial gainwere improperly presented, thus violating the federal regulator'srules on conversions. "This is about how we folded a piece ofpaper. That's all it is," a source close to the landmark conversiontold The Credit Union Journal Monday night. Lawyers for CommunityCU are talking with NCUA about the ruling in hopes of reversing it,the source said. If allowed to stand, Community CU will have toreprint and mail two of the required three rounds of disclosuressent to the credit union's 225,000 members, at a cost exceeding$750,000. Since the disclosures include ballots on the conversion,any votes taken already, expected to number in the tens ofthousands, will also be invalidated. "Typically, most people votewithin 15 days of getting their ballots. People have alreadystarted voting," the source said.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER