Congress Scrutinizes NCUA ConversionRulings
WASHINGTON - (06/10/05) -- NCUA's ruling invalidating theongoing conversion ballots at two Texas credit unions came underfire on Capitol Hill Thursday, where lawmakers were being urged bylobbyists for the Community CU and OmniAmerican CU to intervene inthe matter. Rep. Brad Sherman, D-Calif., a strong credit unionsupporter, told NCUA Chairman JoAnn Johnson during hearings onregulatory relief he believes the agency overreacted byinvalidating the voting of the two credit union giants on what hesees as a technicality. "The bottom line," said Sherman, during ahearing before the House Financial Services Subcommittee onFinancial Institutions, "is did credit union members get everythingthey needed to decide which way to vote." Earlier in the hearing,Johnson clashed with the federal thrift regulator after the twowere asked by Rep. Sue Kelly, R-N.Y., whether there is too muchregulatory burden involved in such charter changes. "The currentsystem, I believe, today, has become more burdensome simply because(of NCUA's requirements) on taking a membership vote, RichardRiccobono, acting director of the Office of Thrift Supervision,told lawmakers. But Johnson said NCUA's rules on membership votes,such as those used to disqualify the voting at the two Texas creditunions, are aimed at ensuring that member/owners/consumers arefully informed of the ramifications of the change in charters."Putting forth information that membership needs to be informed,bringing it into the sunshine, is the way to go for consumerprotection," she said. The airing of the rare regulators'disagreement, first reported in The Credit Union Journal this week,came after top executives of the Community CU and OmniAmerican CU,attended by high-powered Washington lobbyists, spent several daysvisiting lawmakers to obtain support in their ongoing dispute withNCUA.