ALEXANDRIA, Va. -- NCUA released a legal opinion letter (07-0627) last week clarifying the member-to-member communication provisions in the updated mutual savings bank conversion rule for an attorney at Silver, Freedman & Taff, LLP, which assists in these conversions.

NCUA Associate General Counsel Sheila Albin told the firm that, generally speaking, if a member has provided the credit union an e-mail address, it "must assume the member has consented to receive conversion-related member-to-member communications electronically from the credit union."

She continued, "When NCUA revised its MSB conversion rule in December 2006, one purpose of the revision was to improve the flow of information between members on a pending conversion proposal and associated member vote. Toward that end, the rule includes a procedure to facilitate communications between members, through the credit union, as the members prepare to vote."

Under the updated rule, a member may ask the credit union to communicate with the other members provided the member pays for the communications. The credit union must let all the members know how many members there are and how many accept electronic communications as part of its 90-day notice of conversion.

"Our view is, if a member has provided his or her e-mail address to the credit union for any purpose, the credit union must assume the member has agreed to accept conversion-related communications electronically unless the credit union has specific evidence a member does not want to receive conversion-related communications electronically," Albin wrote. "This view facilitates the member-to-member contact intended by the rule."

She added, in response to a question from the firm, that electronic disclosure requirements under Truth-in-Savings and E-SIGN do not apply in mutual savings bank conversions because they are not savings or transaction related.

"Finally, we caution credit unions not to impose additional procedures in order to hamper member-to-member communications or engage in any activity encouraging members to restrict their communications with other members under the MSB conversion rule," she warned. "For example, credit unions should not amend current, standard consent agreements or forms that expressly allow certain electronic communications with the credit union so as to restrict conversion-related member-to-member communications."

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