Department of Labor form should exclude credit union data
CUNA recommends the Department of Labor (DOL) issue a final rule on financial reporting for labor organizations that exempts the reporting of information on labor-affiliated credit unions, it wrote Monday. CUNA’s letter is in response to a DOL proposal to amend a form submitted by labor organizations to file trust annual financial reports, as the proposal lists “credit unions” in the scope of labor organizations’ trusts.
The DOL is proposing to establish a form, Form T-1, to capture financial information pertinent to “trusts in which a labor organization is interested.” While credit unions are listed as an example of a “trust,” the Department also acknowledges that credit unions are subject to “extensive reporting requirements” under other laws and regulations, thus the DOL is considering an exemption for the reporting of information related to affiliated financial institutions in the final rule.
“Although the Form T-1 would be completed and reported by the covered labor organization, not the affiliated trust or financial institution, CUNA strongly recommends the Department issue a final rule that includes an exemption for credit unions affiliated with labor organizations,” the letter reads. “In 2008, the Department recognized the highly regulated nature of union-affiliated banks and exempted those institutions from Form T-1 reporting but failed extend to this common-sense solution to credit unions. The Department should fix this oversight and provide parity by extending the reporting exemption to credit unions as credit unions are also highly regulated by NCUA and other financial regulatory agencies.
CUNA also notes that the structure of a credit union – which includes a democratically-elected board of directors – does not warrant the treatment of a credit union as a labor organization’s “trust.”
“Credit unions, including those with a labor organization-based field-of-membership, are distinct, independently-managed legal entities,” the letter reads. “As such, the NCUA has strict rules in place prohibiting improper lending and self-dealing and the agency conducts regular examinations for compliance with these requirements.”