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CU execs must serve only one board NCUA says
ALEXANDRIA, Va. (9/12/11)--The National Credit Union Administration’s (NCUA) management official interlocks rule prohibits members of a credit union’s management team from serving other nonaffiliated depository organizations, NCUA Associate General Counsel Hattie Ulan said in an agency legal opinion. The opinion responded to a question from Everence FCU President/CEO W. Kent Hartzler. Everence FCU, which is based in Lancaster, Pa., held $124 million in assets from more than 15,000 members as of March. The credit union’s membership is open to “everyone who is interested in practicing Christian stewardship,” according to its website. The institution and related organizations are tied to the Anabaptist Mennonite church. The credit union is tied to Everence Financial, a “variety of companies that provides insurance and financial products,” the NCUA said. The agency in its opinion said it was concerned that Everence FCU’s board “is improperly controlled by Everence Financial, particularly with regard to Everence Financial’s selection of the federal credit union's slate of candidates for its board of directors.” The president and chief executive officer of Everence Financial serve on the credit union’s board of directors, and also serve as board members for Everence’s thrift. According to the agency, the Interlocks Act and NCUA’s rule “generally prohibit an federal credit union's management official from simultaneously serving as a management official of another depository organization that has an office in the same city, town, or village unless the dual service qualifies for an exception or NCUA exempts a prohibited interlock.” This same rule is broadened to a “relevant metropolitan statistical area” if each institution has total assets of $50 million or more, the NCUA added. The Everence directors would be covered under these NCUA rules, as Everence FCU and the associated thrift each have offices in the same jurisdiction. However, Ulan suggested that the directors and their credit union could petition for an exemption with the agency. For the full opinion, use the resource link.
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