CUNA and NAFCU Comment Letters on NCUA Change of Officer Proposal at Odds

ALEXANDRIA, Va. – While NAFCU has come out in support of NCUA’s proposal to clarify a 30-day waiting period for new officers to take their positions at new or troubled credit unions, CUNA has said it may have unintended consequences. Two provisions of NCUA’s rules, 701.14(e) and (c), are inconsistent. Currently, board members, committee members, or senior executives may begin serving temporarily at new or troubled credit unions under section (e) until NCUA gives their approval or disapproval of the individual at a new or troubled credit union. However, (c) requires 30 days prior notice, unless NCUA disapproves before the time is up. To straighten out the problem, NCUA has proposed creating a 30-day wait period. NAFCU supported the proposed regulation as providing “clarity” to the rule, but the trade association also asked for further clarification as to whether the 30 days would start at the time of notice or following a 10-day period the appropriate regional director has to tell the credit union whether the notice is complete. NAFCU recommended the 30-day period should begin when the notice is submitted unless the credit union is notified that it is incomplete. On the other hand CUNA said, while NCUA’s efforts to review its regulations are laudable, this proposal could lead to longer-than-necessary open seats in key management positions. “In our view,” CUNA Senior Regulatory Counsel Catherine A. Orr wrote, “the current language allowing a candidate for a director or senior management position to serve, while the credit union seeks approval of the managerial change, is preferable and more beneficial to the credit union than the proposal.” She added credit unions already face difficulty in filling senior positions and that the person would be terminated if NCUA does not approve of them. Additionally, Orr noted that the current rule has a number of requirements that should ensure that the credit union looked at the individual enough to make sure they are qualified. In conclusion, CUNA recommended NCUA maintain the current language.