CUNA generally supports the overall intent of NCUA’s proposal to provide greater flexibility in the area of compensation to credit union executives, but believes additional changes are needed for credit unions to remain competitive with their banking counterparts.
“While we support the intent of this regulation to limit undue risk to credit unions regarding lending, to remain competitive with our banking counterparts, we believe changes to the regulation allowing additional types of compensation to senior executives is appropriate, so long as there is an appropriate balance that incorporates sufficient risk management,” the letter reads.
CUNA’s letter addresses two primary issues:
NCUA’s current regulations establish a blanket prohibition on any commission, fee, or other compensation to any credit union official or employee, or an immediate family member of either, in connection with any loan made by their credit union, with several exceptions.
NCUA’s Regulatory Reform Task Force recommended the agency modify its regulations to “provide flexibility with respect to senior executive compensation plans that incorporate lending as part of a broad and balanced set of organizational goals and performance measures.”