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Cornerstone Comments on Involuntary Liquidation of Federal CUs and Claims Procedures
Friday, March 30, 2018 6:55 AM

Cornerstone Credit Union League has sent its comment letter to the National Credit Union Administration regarding its proposed changes to part 709 of its rules.

Comments are due Monday, April 2.

"Cornerstone supports the proposed revisions to part 709 of NCUA's rules," wrote Cornerstone Regulatory Compliance Counsel Suzanne Yashewski. "We believe the amendment would clarify and improve the procedures that apply to claims administration for federally insured credit unions that enter involuntary liquidation."

Under the current procedure, wages and severance claims are assigned second priority, subordinate among unsecured claims. The proposal, Yashewski wrote, would amend the current rule's payout priority provision by ensuring that employees of an insolvent credit union are treated fairly and compensated in accordance with their contractual employment agreements.

"The proposed rule, applicable to employees of insolvent credit unions under involuntary liquidation, would permit an employee's final paycheck to include compensation for the pay period immediately preceding the liquidation, as well as accrued but unpaid sick and vacation leave, including any severance to which the employee was entitled, provided such terms were documented and objectively applied," Yashewski said.

View the letter in its entirety by visiting the Cornerstone compliance pages. To access this site, you'll need your Cornerstone CUpassport ID and password.

If you need help in crafting comment letters, or if you have questions about this proposal, please contact Suzanne Yashewski at syashewski@cornerstoneleague.coop or 512-853-8516.