NCUA – Conversion of Credit Unions to Mutual Savings Banks

ABA Contact: Keith Leggett, 202-663-5506, Dawn Causey, 202-663-5434
Published: 69 Federal Register 46111, August 2, 2004
Comments Due: October 1, 2004
Disposition: Filed October 1, 2004

In its proposal, NCUA seeks to discourage credit unions that desire to convert to mutual savings banks by imposing new disclosures on the conversion process. These capitalized and bolded disclosures must be contained in every communication with members and address issues such ownership rights within mutual savings banks, conversion expenses and their impact on savings and lending rates, likelihood of stock conversion and costs of conversion. In addition, the proposal requires that the conversion vote be conducted by secret ballot and by an independent entity.

In its comment letter, ABA urged NCUA to withdraw or substantially reconsider the proposed rule. ABA stated that the new disclosures and clarifications add little clarity to the process and do not contribute to understanding by credit union members.  The disclosures greatly increase costs, and continue to improperly invade the jurisdiction of other financial regulators in violation of the CUMAA.

2004 Regulations Chart
Federal Register
Comment Letter