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CU System
Washington state regulators OK CUs to convert MasterCard stock
OLYMPIA, Wash. (12/13/07)--Washington state’s credit union regulators Monday gave the OK for state-chartered credit unions to convert their nonmarketable Class A shares in MasterCard Inc. to Class B shares. Class B shares can be sold on the open market. According to Linda Jekel, director of credit unions at the Washington Department of Financial Institutions (DFI), credit unions may continue to hold the stock, even though state law prohibits credit union from owning equity, because they obtained the shares in an unusual IPO. MasterCard requires financial institution shareholders who received Class B shares in its May 2006 initial public offering (IPO), to convert to Class A shares. Although they can convert shares already owned, credit unions may not buy or sell additional MasterCard shares on the market. Jekel said examiners may require a credit union to divest the shares if they decide the stock is not safe and sound. Washington state-chartered credit unions can be approved to hold MasterCard Inc. Class B shares by applying with DFI, Jekel told News Now. “DFI will approve Washington state-chartered credit unions to hold MasterCard stock because they have received it, not as a purchase, but rather from a business decision made by MasterCard,” she explained.
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