SHERMAN, Texas (08/26/05) A federal magistrate has released the text of its 17-page ruling in its findings against NCUA and the agency's efforts to overturn a member vote in favor of conversion to a mutual savings bank charter at Community Credit Union.
NCUA invalidated the vote, saying disclosures to members were inadequate because of the way the disclosures were folded and provided to members. "The Court finds that the action by the Administration is arbitrary and capricious," wrote the magistrate. "Although the Administration spends considerable time in its rejection letter on the positioning of the boxed disclosure, in final analysis, the NCUA's position is that CCU failed to provide members with required disclosure materials …The record indicates that nothing could be further from the truth."
The magistrate ruled that NCUA Chairman JoAnn Johnson had taken it "upon herself to determine whether the notice to members is accurate and not misleading. There is nothing in the Director's letter dated July 11, 2005 that makes any determination that the notice was inaccurate or misleading. The agency's determination was not only inconsistent with its own regulations, but under all the circumstances, it was arbitrary and capricious."
The magistrate added, "the Court finds that an injunction best serves the public interest by upholding the CCU membership decision, reached in a democratic manner and in compliance with all statutes and regulations, to convert to a mutual savings bank."