Former Securities and Exchange Commission Chairman Harvey Pitt called on credit unions to comply with the comprehensive audit and disclosure requirements of the Sarbanes-Oxley Act of 2002, even though credit unions are not publicly traded.
"Bad things happen to good companies," Mr. Pitt told credit union executives last week at WesCorp Federal Credit Union's Financial Forum in Indian Wells, Calif. An accounting scandal could taint credit unions' reputation and prompt a Sarbanes-Oxley-like requirement, he said.
"If there is a problem, there will be a clamor for … [credit unions] to be held to the same standards as other companies," Mr. Pitt said.
Sarbanes-Oxley was enacted in response to a wave of corporate scandals that shook investor confidence. The law applies to all publicly traded companies, but banking regulators are also applying some provisions of the law to privately held banks.
At least one credit union, the $12.6 billion-asset State Employees' Credit Union in North Carolina, said recently that it is voluntarily complying with key disclosure provisions of Sarbanes-Oxley.rnal
