PRESS RELEASE
August 29, 2006
ARLINGTON, VA — The National Association of State Credit Union Supervisors (NASCUS) responded to the National Credit Union Administration’s (NCUA) request for comments on the agency’s proposed changes to Rules and Regulations Part 708a: Conversion of Insured Credit Unions to Mutual Savings Banks.
In its letter, NASCUS commends the NCUA for a thoughtfully reasoned and thoroughly documented rule. But while NASCUS concurs with NCUA that a credit union’s membership vote must be fair and informed, NASCUS explains that the NCUA should make clear that Part 708a does not preempt state laws and regulations governing conversion.
NASCUS believes that state laws and regulations should define the processes necessary for state credit union conversions. While NCUA has the authority to supervise state-chartered credit unions with federal insurance to ensure safety and soundness, the conversion procedures of these institutions exist with the original chartering authority.
In its letter, NASCUS details the impact of the proposed federal regulation on existing state law framework and recommends adjustments to the proposed rule. “By crafting Part 708a and Part 741.208 in a manner that resolves procedural questions for federal credit union conversion to an MSB while respecting state regulatory and statutory authority, NCUA would fulfill its statutory duty,” states the NASCUS comment letter.
NASCUS explains that such an action would not only uphold state autonomy, but strengthen the dual chartering system. Often when state regulations are allowed to operate parallel to their federal counterparts they prove effective and are adopted throughout the system, states the NASCUS comment letter.
“That this is the third visitation of this issue since 1998 attests to the changing nature of the debate,” states the NASCUS letter. “Therefore, it seems to make little sense to characterize state specific rules in this area as more or less restrictive, but rather simply as different. Whatever the differences, if state law, regulation or policy addresses this issue, there should be no preemption.”
NASCUS appreciates the opportunity to comment on NCUA’s proposed changes to Rules and Regulations Part 708a: Conversion of Insured Credit Unions to Mutual Savings Banks. To view NASCUS’ full comment letter, please follow this link to the NASCUS Web site.
Information
Contact:
Kate Hartig, Director of Communications,
(703) 528-0669 or kate@nascus.org
The
NASCUS mission is to enhance state credit union
supervision and advocate a safe and sound state
credit union system. Founded in 1965, NASCUS
represents all 48 state and territorial credit
union supervisors. NASCUS is advised by the NASCUS Credit Union
Advisory Council, which is made up of nearly
500 of the nation's more than 3,400 state-chartered
credit unions.
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