NCUA Seeks Common Ground With ConversionsAdvocates

Register now

ALEXANDRIA, Va. - (10/15/05) -- NCUA said Monday it has called on agroup lobbying Congress to ease the conversion of credit unions tobanks to join the regulator in its efforts to protect credit unionmembers throughout the controversial process. In an unusual letterto Lee Bettis, head of the Coalition for CU Charter Options, NCUAGeneral Counsel Robert Fenner called on the thrift representativesand others favoring the credit union-to-bank switches to backproposals barring insiders from profiting from the conversion."NCUA asks you to join the agency in seeking legislation that wouldensure directors approve of conversion plans in the best interestsof members and would enable members to make informed decisionsabout charter options promoted by unbiased directors," Fenner wroteBettis, in response to charges that NCUA is unfairly opposed to thecharter conversions. Fenner urged Bettis to support NCUA's proposalfor a five-year ban on insider enrichment, such as through stockpurchases, options or grants, as a result of the conversion. Such aban, asserted Fenner, would ensure that only "unbiased officials"would evaluate whether a conversion is best for a credit union'smembers. Bettis was president of AGE FCU and converted the Albany,Ga., credit union to a mutual savings bank, then a publicly ownedbank now known as Heritage Bank of the South, and is working withthe thrift trade groups to loosen NCUA's regulatory control overcredit union conversions.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER