The National Credit Union Administration last week requested public feedback on ways it can change its regulations on loan-based compensation to “provide greater flexibility.”
“The [NCUA] board is seeking comment on how to update the regulations so that credit unions can offer competitive compensation plans without encouraging inappropriate risks, incentivizing bad loans, or negatively effecting (sic) safety and soundness,” the agency said in an advance notice of proposed rulemaking to be published tomorrow. “While the board is particularly interested in how the agency can update its regulations to provide flexibility with respect to senior executive compensation plans, it would also like comments on how the regulations governing compensation associated with lending can be modernized generally.”
The move to ease regulations on incentive compensation comes as credit unions receive scrutiny for not being required to disclose executive compensations. With the exception of houses of worship and the very smallest nonprofits, credit unions are the only tax-exempt organizations not required to file Form 990 with the IRS. Former Senate Finance Committee Chairman Orrin Hatch last year urged the IRS to require large and complex credit unions to file 990s. Comments on the ANPR are due by June 22.
