ALEXANDRIA, Va. -
"Our view is, if a member has provided his or her e-mail address to the credit union for any purpose, the credit union must assume the member has agreed to accept conversion-related communications electronically," NCUA said in a new legal opinion letter furnished to Silver, Freedman & Taff, the Washington lawyers who have engineered most of the conversion to mutual savings banks.
Under NCUA's new rules, a member who wants to communicate with other members about the conversion may request the credit union send the communication at the member's expense by regular mail to all voting members-or electronically, if the members have already requested e-mail notifications.
Since the member must pay for the communications, the credit union must let all members know, as part of the 90-day notice of conversion, how many voting members there are and how many have agreed to accept communications in electronic form.
The electronic communications provision was part of the agency's December 2006 revision of the conversion rule-the third time in two years the rule was changed. The main purpose of the provision was to facilitate communications between members who oppose the switch to bank, most of whom have been thwarted by management, which has already decided on the charter conversion.
NCUA notes in the legal opinion letter that e-mail has several advantages, most of all the expense, as well as the immediacy. "Cost and speed are important considerations given that the conversion process has time constraints and the credit union may need to prepare and send the communication to thousands of voting members," said NCUA.
NCUA delivered a warning at the end of the letter for management and directors who may seek to limit member opposition to conversions. "Finally, we caution credit unions not to impose additional procedures in order to hamper member-to-member communications or engage in any activity encouraging members to restrict their communications with other members under the MSB conversion rule. For example, credit unions should not amend current, standard consent agreements or forms that expressly allow certain electronic communications with the credit union so as to restrict conversion-related member-to-member communications," the legal opinion stated.
Silver, Freedman & Taff is currently advising several credit unions, including Boston's First Priority CU and First Basin FCU in Texas, on their pending conversions to mutual savings.
