ALEXANDRIA, Va.–There will be no more sweetheart deals for executives at credit unions that have to be liquidated.
In addition to hearing an update on new, more streamlined call reports, the NCUA board at its January meeting also took several other actions, including clarifying rules around involuntary liquidations.
The board voted 2-0 to amend NCUA’s regulation on involuntary liquidation to update and clarify the procedures that apply to claims administration for federally insured credit unions that enter involuntary liquidation. Specifically, the board amended the current rule’s payout priority provision by specifying the conditions that claims in the nature of severance must meet to be allowed as provable claims. The proposed change regarding severance claims now clarifies who can receive so-called “golden parachutes,” which in the past have been paid out to some executives at credit unions that failed.
Under the new rule, such severance pay would only be allowed if two conditions are met: there is documentary evidence at the liquidated CU of the severance plan, and that such a plan be available on a non-discriminatory basis to all employees based on objective criteria.
The NCUA board also approved its 2018 – 2022 Strategic Plan, and 2018 Annual Performance Plan.
NCUA received five comment letters on the strategic plan, most of which it said were supportive. The Strategic Plan essentially focuses on three primary areas: efficient implementation of the exam program, risk analysis and identification of key trends, and the promulgation of effective rules.
“This has been a long process, and I think it’s been a responsive process to the community,” said NCUA Chairman J. Mark WcWatters. “I think it’s a very, very good strategic plan that will guide the agency for several years. “
As per the Federal Civil Penalties Inflation Adjustment Act of 1990, the board also approved the annual increase in the maximum amounts of civil money penalties to account for inflation, in this case about 2%.
NCUA’s 2018 – 2022 Strategic Plan, and 2018 Annual Performance Plan can be found in CUToday.info’s The Gov.