Texas Rep. Jeb Hensarling (R) has asked the Government Accountability Office to investigate whether NCUA is obstructing the conversion of credit unions to mutual savings banks.
The request by Hensarling follows a similar appeal by the banking trade group America's Community Bankers for a GAO study. ACB suggested that "unwarranted interference" by NCUA is preventing some credit unions from converting to mutual savings banks.
In his own letter, Hensarling said recent news reports had "given the impression that a bias against credit union conversions may exist at the NCUA and could lead the administration to intentionally or unintentionally obstruct the ability of credit union members to decide freely and fairly the future of their credit union."
Two Texas credit unions are in the process of converting to mutual savings banks-Community Credit Union, which will become Viewpoint Bank on Jan. 1, and OmniAmerican Credit Union. In both cases, NCUA initially invalidated the votes, claiming insufficient disclosure had been provided, before being turned back in the courts.
CUNA CEO Dan Mica issued a statement saying the trade association was confident that any study would show the agency was looking out for the interests of credit union members.
"We are confident that it will show the agency's ultimate concern in considering conversion applications is that the owners of the credit unions-that is, the members themselves-fully understand the consequences and realities of a charter change," said Mica.
Mica noted it is CUNA's position that credit union members have every right to know the effect a conversion has upon their ownership in the credit union.
"Beyond that, CUNA intends to ask Rep. Hensarling to request that GAO also look into the impact of such charter changes on members, and their ability to be fully informed of the consequences of conversions," Mica added.
At NCUA, meanwhile, NCUA Chairman JoAnn Johnson issued a statement saying the agency "appreciates an open dialogue with Congress and GAO on issues affecting America's credit union members. We will continue to work with Congress to provide the needed transparency to protect consumers who are asked to consider such an important matter."
WHAT GAO HAS BEEN ASKED TO EXAMINE
Specifically, Rep. Hensarling is asking the GAO to determine:
* Whether the NCUA's actions conform with, or exceed, the powers granted by the 1998 Credit Union Membership Authorization Act (CUMAA) which grants the NCUA the authority to oversee the methods and procedures of a conversion vote.
* Whether the NCUA's rules and guidelines for conducting a conversion are "no more or less restrictive than that applicable to charter conversions by other financial institutions," as required by law.
* Whether the behavior of the NCUA in overseeing conversions acts as an undue hindrance on the ability of credit unions to convert.
