NCUA Preempts State Regulator On GiantConversions
AUSTIN, Texas - (05/27/05) -- In invalidating expensive membervotes on two giant credit union conversions, NCUA bypassed stateregulators, who have nominal authority over the two state charteredcredit unions, Community CU and OmniAmerican CU. "I've not talkedto NCUA on this," said Harold Feeney, director of the Texas CUDepartment. "I got the letter (invalidating the mail ballot) thesame time Community CU got it." Feeney told The Credit UnionJournal his department has approved both the applications toconvert by the two billion-dollar credit unions and the process,but NCUA has final authority over the balloting because both creditunions are federally insured. Under NCUA's newly passed rules onconversion, the federal rules preempt all state rules, unless thestate rules are more strict, according to Feeney. "They claimed the(state) rules were not more strict," he said.