|National Association of State Credit Union Supervisors: NCUA Has A Conflict of Interest on Mutual Conversions|
In a July 12, 2005 letter to U.S. Rep Michael Oxley, Chairman of the Committee on Financial Services, NASCUS President and CEO Mary Martha Fortney wrote: "A conversion (from a credit union to a mutual) is a function of a credit union's original charter, and should be separate from insurance oversight, especially since the members of the converting credit union are merely moving from one form of federal deposit insurance, provided by the NCUSIF to another, provided by the FDIC."
NASCUS is on the record with its position that the NCUA has a conflict of interest between its dual role as the authority over federal credit unions (as charterer) and administrator of the insurance fund (NCUSIF). As the combined deposit of both Texas credit unions in the NCUSIF amounted to approximately $17 million, former NASCUS Chairman Roger W. Little, deputy commissioner of the Michigan Office of Financial Institutions felt it was fair to raise the potential conflict by asking, "Is the NCUA a disinterested party?"
Editors note: NCUA transfers about 60% of the earnings from a credit union's share deposit to its own operating budget. The loss in NCUA's revenues related to the Texas transactions are estimated at $850,000 during fiscal year 2005, or $5.1 million over the typical term of a NCUA board member. NCUA's operating budget is completely dependent on these earnings and operating (examination) assessments of federal credit unions.