Texas CU Department Largely Rules Against Community Members Group

DALLAS – The Texas Credit Union Department has largely ruled against the Coalition for Member Trust, the organization of some members of the $1.4 billion Community Credit Union which oppose the credit union’s move to become a mutual bank. The Dallas area credit union is in the last month of its charter change effort. In a May 31 letter, Harold Feeney, Department Commissioner, found against the members’ group in each of the areas of complaint it had raised about the way the credit union had conducted its disclosures and was conducing its balloting on the charter change decision. Significantly, the Commissioner ruled against the parts of the members’ complaints which strongly resembled NCUA’s objections to the way Community put together its disclosure packages. NCUA and the members had alleged that the credit union’s disclosures violated the requirement that NCUA mandated language should have been folded so that it was the first thing a member saw after the package’s cover letter, but the Department said that it had been folded in a standard manner. “Based upon the samples reviewed, it certainly appears to this office that the document containing the Boxed Disclosure was folded in the standard manner, i.e. first page facing up, folding the bottom 1/3 up and then the top 1/3 over,” Feeney wrote. “Following this standard convention of folding documents, the Department must conclude that the Boxed Disclosure was indeed the front sheet of the two-sided document.” Feeney also noted that the Texas CU Department had not received any other complaints from credit union members except for the members of the Coalition. Feeney also noted that the NCUA’s Boxed Disclosure regulation had been adopted by NCUA only after the credit union’s application had been received and, therefore, was not something that the Texas Credit Union Department could rule upon. NCUA had also previously stated that its rule was more restrictive than the Texas rule and thus pre-empted the more lax state rule. The Texas Department also said that Community was well within its rights to limit its annual meeting to members and to close the meeting to members who could not be verified because the “verification booth” had closed. “Given the presence of non-members who had already tried to gain admittance prior to the start of the meeting, CCU may have been a little faster on the timing of closing of the verification booth than in years past,” Feeney wrote, “however, that can not be legitimately construed as an attempt to stifle debate on a matter, which was not even a posted item on the meeting’s agenda.” -