OTS Approves Community CU’sApplication; Takes NCUA To Task

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WASHINGTON - (07/01/05) The Office of Thrift Supervision hascertified the vote by Community Credit Union members to convert theCU to a bank charter and implicitly called NCUA to task as the soleholdout on the $1.4-billion CU’s proposed conversion. In itsorder certifying the vote, OTS chastised NCUA for“disapproving” CCU’s disclosure notices afterhaving preliminarily approved the documents. Moreover, OTSsuggested NCUA’s required, so-called box disclosures arepotentially misleading. “The NCUA raised no objection to theadditional information that the credit union placed on the reverseside of the single sheet of paper, and, in fact, preliminarilycleared the credit union’s disclosures, including thedisclosures placed on the reverse side of the boxed disclosures.Similarly, the [Texas Credit Union Department] preliminarilycleared the same disclosures,” OTS Acting Director Richard M.Riccobono wrote in the June 29 order. “OTS concludes thatthere is no reason to object to the credit union’s additionof information set forth on the reverse side of the boxeddisclosures, because the additional information mitigatespotentially misleading statements included in the NCUA’srequired disclosures.” OTS raised the specter of NCUA’sown process potentially misleading membership and tainting the votein a footnote that suggested OTS determined only CCU’s ownstatements mitigated the need for further investigation ofNCUA’s language by OTS.

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