NCUA To Propose Exec Pay Curbs

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ALEXANDRIA, Va. – The NCUA Board will follow the banking regulators and propose a rule next week that will give the agency oversight over executive compensation for the largest credit unions, those over $1 billion.
The rule to be issued for public comment will bar bonuses and other compensation packages tied to risky activities–such as the ones NCUA alleges helped sink WesCorp FCU–and will require the big credit unions to disclose pay packages for all executive officers. That will include: president, chief executive officer, executive chairman, chief operating officer, chief financial officer, chief investment officer, chief lending officer, chief legal officer, chief risk officer, or head of a major business line.
The proposed rule is required under provisions of the Dodd-Frank Financial Reform Act which seeks to rein in excessive Wall Street compensation that was found to be tied, in many cases, to risky activities that caused some of the biggest losses during the financial crisis. The FDIC proposed additional provisions on the biggest banks, those over $50 billion, which would require those firms hold on to at least half the bonuses paid to top executives for three or more years.
There are about 175 credit unions over $1 billion in assets that the NCUA will would apply to.
The proposed rule is supposed to be effective six months after publication of the final rule in the Federal Register, with annual reports due within 90 days of the end of each institution’s fiscal year.  

The other agency’s proposing the rule are the Federal Reserve, Office of the Comptroller of the Currency, Office of Thrift Supervision, the Securities and Exchange Commission and Federal Housing Finance Authority, the regulator for Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks.ALEXANDRIA, Va. – The NCUA Board will follow the banking regulators and propose a rule next week that will give the agency oversight over executive compensation for the largest credit unions, those over $1 billion.

The rule to be issued for public comment will bar bonuses and other compensation packages tied to risky activities–such as the ones NCUA alleges helped sink WesCorp FCU–and will require the big credit unions to disclose pay packages for all executive officers. That will include: president, chief executive officer, executive chairman, chief operating officer, chief financial officer, chief investment officer, chief lending officer, chief legal officer, chief risk officer, or head of a major business line.

The proposed rule is required under provisions of the Dodd-Frank Financial Reform Act which seeks to rein in excessive Wall Street compensation that was found to be tied, in many cases, to risky activities that caused some of the biggest losses during the financial crisis. The FDIC proposed additional provisions on the biggest banks, those over $50 billion, which would require those firms hold on to at least half the bonuses paid to top executives for three or more years.

There are about 175 credit unions over $1 billion in assets that the NCUA will would apply to.

The proposed rule is supposed to be effective six months after publication of the final rule in the Federal Register, with annual reports due within 90 days of the end of each institution’s fiscal year.  

The other agency’s proposing the rule are the Federal Reserve, Office of the Comptroller of the Currency, Office of Thrift Supervision, the Securities and Exchange Commission and Federal Housing Finance Authority, the regulator for Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks.

 

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