ALEXANDRIA, Va.–When the National Credit Union Administration board meets today it will consider a new rule to require federal credit unions to provide information on executive compensation to their members.
Overall, there are three items on the board’s agenda: succession planning, the federal credit union loan interest rate ceiling, and proposed rules on incentive-based compensation. It is that latter item that could require federal credit unions to disclose how and how much they are compensating their executives, much like what state-chartered credit unions already provide through their tax forms.
Proposal More Than a Dozen Years Old
That rule is actually a joint-rule required of several financial regulators that was part of the Dodd-Frank Act and which, as America’s Credit Unions Chief Advocacy Officer Carrie Hunt pointed out, has been percolating for about a dozen years now
According to the White House Office of Management and Budget’s recently released spring regulatory agenda, the incentive-based compensation is aimed at providing the greater disclosures to members in addition to what FCUs are required to disclose through IRS Form 990.
Two Different Rules
“To be clear…when the NCUA issued their semiannual regulatory agenda…there were two different rules relative to executive compensation,” said Hunt in an interview earlier this week in CUToday.info. “One was a in a stated rulemaking that has not yet been proposed, and based on the brief description it would require federal credit unions to report information relative to executive compensation similarly to what state credit unions already report on the 990s. That is not what is being proposed (for Thursday). What potentially will be proposed by the NCUA…is a rule that comes out of Dodd-Frank…(where there) certainly will be some additional reporting requirements, but that rulemaking will have a bigger impact on for-profit and institutions regulated by the SEC. So, there will potentially be some additional burden and as we read that proposal, we'll be providing our comments on that.”
ABA, State Bankers Urge Disclosures
The American Bankers Association and State Association Alliance both said in a statement they have been strongly advocating for credit union accountability and transparency, “believing that such reporting could help provide critical data on credit union activities to consumers and communities alike.”
The meeting will be live streamed starting at 10 a.m. ET at NCUA.gov. CUToday.info will provide complete coverage.