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Board Member Gigi Hyland’s Statement on the Conversion Rule Proposal Considered at Today’s Board Meeting

June 22, 2006, Alexandria, Va. -- This proposed rule is important for many reasons, not the least of which is that it will help clarify an area that has become fraught with controversy over the last several months.  The conversions of credit unions to mutual savings banks are viewed in vastly different ways by the various parties involved.  In addition, the NCUA has been the subject of increased scrutiny as evidenced by the May 11th hearing on this issue held by the House Subcommittee on Financial Institutions and Consumer Credit. 

I commend staff for drafting a proposed rule that is balanced and stays true to the statutory language in the Federal Credit Union Act. I believe the proposed rule suggests clear guidelines for credit union boards as they seek to have the credit unions’ members approve a conversion. In particular, the proposed rule includes language that provides members very clear disclosures about how the board arrived at its decision; very clear language on the ballot about the meaning of the actual vote; certification of fiduciary duty requirements by the board; and how the members can participate in the decision-making process.

I urge the public to provide specific and detailed comments on this proposal.  As I have stated on many occasions, if you believe in credit unions, you believe in the ability of the members to choose their financial institution. But they can only make that choice if given all the facts in a fair and timely manner.

The conversion proposal is available online at http://www.ncua.gov/RegulationsOpinionsLaws/proposed_regs/proposed_regs.html.

The National Credit Union Administration is the independent federal agency that regulates, charters and supervises federal credit unions. NCUA, backed by the full faith and credit of the U.S. government, also operates the National Credit Union Share Insurance Fund (NCUSIF), insuring the deposits of nearly 85 million account holders in all federal credit unions and the majority of state-chartered credit unions.