New Rules Would Open CU ConversionProcess
AUSTIN, Texas - (06/12/06) Texas, home to the two biggestcredit union conversions to mutual savings bank, adopted new rulesFriday that will require credit union management to notify membersof a proposal to convert to MSBs before the matter is voted by theboard of directors. The new rules, adopted Friday by the Texas CUCommission, will require that members be sent a notice explainingthe details and ramifications of the conversion before a Boardvote, according to Harold Feeney, director of the states CUDepartment. The new rules will also require the credit union toprovide a process for members to express their opinion on theconversion proposal. The new rules will be published this week inthe Texas Register and are effective 20 days afterwards, Feeneytold The Credit Union Journal. Last years conversions of twocredit unions giants, $1.5 billion Community CU and $1.4 billionOmniAmerican CU, caused a major controversy which was only resolvedby a federal court order allowing the conversions to becompleted.