New Rules Proposed For CU Conversions
NCUA has proposed expanded disclosures for those CUs interested in switching to mutual banks.
"We believe that the members have the right to do with that institution as they so desire," said NCUA Chairman Dennis Dollar, "However, I think it is crucially important in this post-Enron era in which we live that members are fully informed."
The proposal, issued for a 60-day public comment period, would require boards to disclose to members any remuneration or reward they might receive from the conversion, and what plans there may be for taking the converted CU public. Dollar has also proposed tightening the voting requirements for conversion from the current majority of voting members, to a majority of all members. So far, 24 CUs have converted to mutual savings banks, with 13 either selling the institution via an IPO or merging with banks.