Federal credit unions may not provide paid employees who sit on volunteer committees a loan rate reduction offered all employees, according to NCUA.
"A credit union cannot offer preferential loan rates to any of its officials," the agency said in a new legal opinion issued to People's CU, in Middletown, R.I. CU officials, said NCUA, may receive reduced loan rates, but the rates for officials must not be more favorable than comparable rate to other members. The rule is intended to limit insider dealing and would not be effective if employee-officials could receive preferential loan rates as part of a their employee compensation.
