CUNA Board Takes Stance On Conversions
CUNA's board has adopted four new resolutions, one of which is related to credit union-to-bank conversions.
Based on its own Government Affairs Committee's recommendations, CUNA's conversion resolution is made up of six provisions, including:
1. The credit union charter presents the best vehicle for serving the financial needs of consumers.
2. Credit unions considering changing ownership structure to a bank or thrift charter should decide solely on the basis of what is best for the members of the credit union-not for the management or directors.
3. The credit union system should identify and recommend ways to keep the credit union's net worth in the hands of its members.
4. Credit unions should provide plain language, full disclosure of all relevant information-including the pros and cons-of a change in the ownership and governance of the credit unions.
5. CUNA supports legislative, regulatory, and legal measures that will ensure credit union senior management and directors are not unjustly enriched, and that appropriate penalties will be imposed for noncompliance with disclosure and other requirements designed to protect the interests of the members.
6. CUNA is rededicated to the improvement of the credit union charter.
Separately, CUNA also adopted resolutions related to:
* Prompt Corrective Action. The CUNA board said it supports modifications to statutory PCA net worth requirements to conform net worth standards more closely to the unique risk profile credit unions.
* Unrelated Business Income Tax (UBIT). The board called for resolving the issue with the IRS.
* Bounced check protection. CUNA called for the adoption of bounce privilege guidelines and ethical standards for credit unions to help emphasize their concern for consumers and further distinguish credit unions as institutions that care more about people than money.