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Examiners Must Scrutinize CUs Dealing with Unregistered Broker-Dealers

ALEXANDRIA, Va.-NCUA Board Member Deborah Matz charged some of the agency's top executives during the December board meeting with strengthening examination procedures aimed at preventing safety and soundness threats from unregistered broker-dealers. More than 100 credit unions were affected when the Securities and Exchange Commission charged Bentley Financial Services, Inc....

By Staff Writer | Updated on December 31, 2002

ALEXANDRIA, Va.-NCUA Board Member Deborah Matz charged some of the agency’s top executives during the December board meeting with strengthening examination procedures aimed at preventing safety and soundness threats from unregistered broker-dealers. More than 100 credit unions were affected when the Securities and Exchange Commission charged Bentley Financial Services, Inc. with securities fraud. Bentley was accused of selling securities that it misrepresented as insured CDs. “I am amazed that at least 100 credit unions, 60 of which were federal charters, did business with Bentley and not one examiner raised the alarm. We at NCUA need to be more vigilant in helping credit unions avoid unscrupulous broker-dealers,” Matz said. She gave Executive Director Len Skiles and Director of Examination and Insurance Dave Marquis 60 days to have recommendations on her desk. Matz made the announcement during the discussion of new proposed regulations to strengthen credit union investment standards. “But Bentley didn’t even meet the current standards,” she pointed out. “We don’t want to impose undue regulatory burdens especially if the regulation doesn’t correct the problem,” she commented. “So I urge leagues and credit unions to think about the problem we are trying to address-credit unions that purchase CDs from unregistered broker-dealers-and let us know if there is a way to address this problem that we might not have considered.”

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