The National Credit Union Administration proposed another hurdle Monday for credit unions that want to become federal mutual thrifts.

Under the proposal, credit unions would include on the first page of all disclosure documents nine sentences warning members that they could lose some voting rights if the institution switches charters.

"If a credit union converts to a savings bank, the institution will no longer be democratically controlled with each member having one equal vote," according to part of the new disclosure.

"The larger depositors will have more votes than the smaller depositors."

The disclosure also would inform members that they would lose their ownership stake in the thrift if it later coverts to a stock-owned institution. Further, it warns that two years after the initial conversion, board members could get compensation and stock options unavailable to other members.

The proposal will be published shortly in the Federal Register; comments will be due in early February.

NCUA board members, who voted 2-1 in favor of the proposal, clashed over whether the wording is too leading.

Dissenter Yolanda T. Wheat called the statement "inappropriate" and said it unfairly prejudges that all credit unions switching to mutual thrifts are on a "slippery slope" to stock ownership.

"This language serves to confuse and not to inform," she said.

The other board members responded that the statement is accurate, not burdensome, and merely emphasizes information in current disclosures.

"It is an attempt to better inform the membership ... that if the conversion of a credit union to another type of financial institution occurs, there are benefits that go with belonging to a credit union that will be lost," NCUA Chairman Norman E. D'Amours said.

The proposal drew criticism from some consultants and lawyers who represent credit unions seeking to switch charters.

"It's just another tactic by NCUA to do what they can to stop the conversion process," said Alan D. Theriault, president of CU Financial Services, a Portland, Maine, consulting firm.

NCUA has only one conversion application pending, although 20 other credit unions are contemplating the move. Only four applications have ever been approved.

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