WASHINGTON — CUNA has written NCUA in opposition to the agency's proposal to add a conflict of interest provision to the eligible obligations rule because it is unnecessary while NAFCU said in its comment letter the trade association saw the logic of it; Navy Federal Credit Union, whose CEO sits on NAFCU's Board, came down on the side with CUNA.

CUNA's letter, written by Senior Assistant General Counsel Jeff Bloch, stated that NCUA had not made the case for the need for the additional regulation. "CUNA agrees that credit unions should avoid conflicts of interest, including for these types of activities, as well as any appearance of such a conflict," he wrote. "However, NCUA has not provided any information in the Supplementary Information or elsewhere to support the need for this new rule change. Furthermore, there is no other indication that FCU officials have engaged in activities involving eligible obligations that benefited them, their employees, or immediate family members to the detriment of the members' best interests."

Navy Federal was inclined to agree. The organization's letter read, "We question the importance of implementing this proposed regulation when there has been no public outcry for such a regulatory change. This proposed rule will simply introduce an additional regulatory burden on FCUs when none is necessary." The letter added, "the potential negative effects of conflicts of interests are minimal in the secondary market."