ALEXANDRIA, Va. -
The new rules, part of a package aimed at bringing more transparency to credit union operations, will allow any group of members to petition for access to internal records for legitimate reasons. The rules, which attracted broad opposition by credit union managers and the trade groups, will not provide access to the compensation of management, as that issue is being contemplated in another proposal.
NCUA Chairman JoAnn Johnson said the rules do not create any new member rights, but clarify what has been in existence for federally chartered credit unions. "The members of the federal credit union own the credit union," said Johnson. "As owners, the members have the right to inspect the credit union's books, minutes and records when they have a proper purpose."
The new rules will allow any group of members to petition for access to books, records or minutes for "significant corporate purposes," as long as the access would not harm the CU, its members or employees.
In a nod to opponents of the measure, NCUA raised the threshold for access from a petition with at least 1% of members, to be at least 20 and not more than 250 to not more than 500 members in order to address the concerns of large credit unions. Members who sign the petition must have been a member for at least 180 days.
The petitioning members will be responsible for the cost of producing the information.
The credit union will have 14 days to respond to the members' petition, either by providing the requested information or explaining why the information will not be made available.
The NCUA regional office will arbitrate all disputes over the requested information. The new access rules will have priority for federally chartered credit unions over all state corporate laws.
Johnson pointed out that many of these provisions are already set out in standard credit union bylaws, but in some recent cases the bylaws have been abused or been subject to long and costly court battles.
Among those cases were in Vancouver, Wash., where members of Columbia CU who defeated the credit union's bid to convert to mutual savings bank fought unsuccessfully in the state courts to have their member access bylaws enforced.
In Dearborn, Mich., where members of DFCU Financial also failed to have a state court enforce their bylaw rights in a dispute that led to the withdrawal of that CU's conversion. And in Kensington, Md., where members of Lafayette FCU also were unable to get a court to enforce their rights.
NCUA is still mulling at least one other transparency proposal to require disclosure of management compensation during mergers, but avid opposition by credit union executives and the trade associations may persuade the agency to defer or postpone action on that rule.
