Congress Pressures NCUA On CUConversions
WASHINGTON - (04/19/06) -- Congressional hearings into creditunion conversions to mutual savings banks will be aimed atencouraging NCUA to reform its own conversion rules, according toone congressional critic of the agency. Rep. Patrick McHenry,R-N.C., chief sponsor of a bill to ease NCUA's power overconversions, conceded Tuesday his bill is unlikely to be passedthis Congress but he said he hopes next month's hearings willencourage NCUA to amend its conversion rules to, among otherthings, allow greater communication between credit union managementand members prior to the vote. "I'm hopeful with a full (NCUA)Board they will be able to deal with this in a regulatory manner,"McHenry told The Credit Union Journal, referring to last year'sclash with NCUA while it had only one sitting member, ChairmanJoAnn Johnson. "Otherwise, it may require a legislative remedy."McHenry said he has been watching the controversy over DFCUFinancial closely and believes much of the acrimony anddivisiveness over the failed conversion could have been avoided bya greater ability of the DFCU board and management to freelyexplain their plans to members. McHenry's bill, among other things,would eliminate a requirement that NCUA approve all communicationswith members on conversions, thereby speeding up and expandingcommunications, he said. "It enables the credit union to speakfreely to their members and the general public about the benefitsof the conversion." NCUA is preparing amendments to its conversionsrule that would facilitate greater communications between membersand allow credit unions to hold informational meetings to discussthe plans before a board votes to proceed with a conversion tomutual savings bank.