A proposal that updates the federal credit union regulator’s interpretive ruling and policy statement (IRPS) regarding statutory prohibitions of individuals from financial institution service – called the agency’s “second chance” IRPS – will be out for comment until about Sept. 27 under a Federal Register notice slated to publish Monday.
The proposal, issued for public comment by the National Credit Union Administration (NCUA) Board July 18, would rescind NCUA IRPS 08-1, issued to address section 205(d) of the Federal Credit Union Act, and replace it with an updated IRPS 19-1 that would reduce the scope and number of offenses that would require an individual to apply to the agency board for leave to work in an insured credit union.
The agency proposal states that section 205(d) of the FCU Act prohibits, without the prior written consent of the board, a person convicted of any criminal offense involving dishonesty or breach of trust, or who has entered into a pretrial diversion or similar program in connection with a prosecution for such offense, from becoming or continuing as an institution-affiliated party, or otherwise participating, directly or indirectly, in the conduct of the affairs of an insured credit union. It also bars an insured credit union from allowing such a person to participate in the affairs of the credit union without prior NCUA Board consent, it says.
The “second chance” IRPS would not require an application to the NCUA Board for eligibility to work at a credit union for offenses including insufficient funds checks of aggregate moderate value, small-dollar simple theft, false identification, simple drug possession, and isolated minor offenses committed by covered persons as young adults.
During the board’s July 18 open meeting, NCUA Board Chairman Rodney Hood said he was personally committed to more initiatives such as the “second chance” proposal and told the audience to “expect more coming from this agency to work with second-chance individuals.” The IRPS was released with a 60-day comment period.