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Chairman Johnson Responds to Credit Union Conversion Lawsuit

Alexandria, Va., July 11, 2007 – I am disappointed but not surprised by this lawsuit. It attempts to curtail reasonable and basic consumer protections and represents an unfortunate step in the wrong direction with regard to the rights of credit union members.

The new NCUA conversion rule, which became effective January 22, 2007, enhances the ability of the members of credit unions to make informed decisions about their ownership of the institution, and how that ownership would change if a conversion to another form of financial institution would occur. Consumers deserve more, not less, transparency and openness as they consider their choices. NCUA stands firmly behind the credit union members, and looks forward to the Court's review of this fundamental issue.

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