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NCUA Pre-Empts Va. Law on Inactive Accounts

NCUA issued a legal opinion letter stating that the Federal Credit Union Act trumps Virginia law when it comes to a federal credit union's dividend and fee practices regarding dormant accounts.

By Staff Writer | Updated on May 08, 2007

ALEXANDRIA, Va. — NCUA issued a legal opinion letter stating that the Federal Credit Union Act trumps Virginia law when it comes to a federal credit union’s dividend and fee practices regarding dormant accounts.

NCUA legal opinion letter (06-1214) pre-empted Virginia’s Division of Unclaimed Property objection to a federal credit union retroactively waiving account fees or reinstates dividends previously unpaid because of an inactive status. “NCUA’s longstanding position is that a state law, which attempts to govern an FCU’s imposition of account fees and charges, including inactive or dormant accounts, directly conflicts with ?107(6) of the Federal Credit Union Act (FCUA) and ?701.35 of NCUA regulations and is preempted by federal law,” the letter read. NCUA noted that it had pre-empted an earlier version of this same law.

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