Representative Hensarling requested this review after two Texas credit unions requested redress from a federal court in order to complete their conversions.
For those individuals not familiar with the issue, NCUA had invalidated the conversion votes of the two Texas credit unions over how a single two-sided sheet of paper was folded as part of the mailing to the credit unions' memberships.
Representative Hensarling in his letter posed 3 issues that he wanted the GAO to examine:
- Whether the NCUA’s actions conform with, or exceed, the powers granted by the 1998 Credit Union Membership Authorization Act (CUMAA) which grants the NCUA the authority to oversee the methods and procedures of a conversion vote.
- Whether the NCUA’s rules and guidelines for conducting a conversion are “no more or less restrictive than that applicable to charter conversion by other financial institutions,” as required by law.
- Whether the behavior of the NCUA in overseeing conversions acts as an undue hindrance on the ability of credit unions to convert.
Over the last 7 years, NCUA obstructionism has only become worse, making it very difficult, if not impossible, for a credit union to exercise its right to change charters.
It seems the time is right to examine NCUA's tyrannical role in the conversion process.