US lawmaker seeks study on credit union conversion

14 December 2005 - 17:25 GMT

Reuters News - English

(c) 2005 Reuters Limited

WASHINGTON, Dec 14 (Reuters) - Texas Republican Rep. Jeb Hensarling on Wednesday asked the Government Accountability Office to investigate whether a U.S. regulator obstructs the conversion of credit unions into mutual savings banks.

Hensarling's request came on the heels of a letter to the congressman from America's Community Bankers, a trade group, asking for the study because of what it said was "unwarranted interference" by the National Credit Union Administration to keep some credit unions from becoming banks.

The congressman, in his letter to the GAO, said recent articles had "given the impression that a bias against credit union conversions may exist at the NCUA and could lead the administration to intentionally or unintentionally obstruct the ability of credit union members to decide freely and fairly the future of their credit union."

Hensarling asked the GAO, a nonpartisan congressional investigator, to report on whether the regulator's actions conform with or exceed its authority to oversee a conversion vote.

He also asked GAO to investigate whether the regulator's behavior in overseeing conversions acts as an "undue hindrance on the ability of credit unions to convert."

A spokesman for the National Credit Union Administration was not immediately available to comment.