WASHINGTON (6/5/08)—Providing credit unions with guidance to interpret a statutory honesty standard for employees is a good idea, but the National Credit Unions Administration’s (NCUA’s) current plan needs a few changes to be most useful, according to the Credit Union National Association (CUNA. In a comment letter to the agency, CUNA said that the NCUA’s move to establish an interpretative ruling addressing provisions in the Federal Credit Union Act that prohibit persons convicted of criminal offenses relating to dishonesty, breach of trust and certain other offenses from participating in the affairs of a federally insured credit union may be helpful both to credit unions as well as to their examiners. Furthermore, the effort parallels guidance from the Federal Deposit Insurance Corp. and the Office of Thrift Supervisions for their regulated institutions. However, CUNA wrote, the NCUA should discontinue its informal process now used to review credit unions’ applications for prior approval and establish a more formal process. Among its other points, CUNA said:
* While the FDIC has similar guidance, it has also incorporated procedural provisions into its regulation to facilitate compliance for federally insured banks on these issues. CUNA supports this approach to the extent it will make it easier for credit unions to meet their responsibilities; * The FDIC has developed guidance for federally insured banks on pre-employment background screening that also addresses how the prohibition on persons convicted of certain crimes should be dealt with. NCUA should review this guidance and consider adopting it for credit unions, as appropriately modified; * NCUA should establish specific timeframes for when it will respond to consent requests and appeals, and address these issues in its regulations; and * NCUA should provide practical examples to illustrate the phrase, “participate, directly, or indirectly, in the conduct of the affairs of any insured credit union.”
Use the resource link to read more of CUNA’s comment on the NCUA proposal.