NCUA opines that FCUs may keep Visa stock

Nov. 2, 2007—NCUA issued a legal opinion Thursday that says federal credit unions that are members of Visa U.S.A. can retain stock being issued to them in connection with the card company’s conversion to a publicly held corporation.

The opinion is the culmination of weeks of discussion of this issue among NCUA, NAFCU, other credit union representatives and Visa.

According to the Nov. 1 letter, FCUs are permitted to hold the Visa stock because they are not paying any money to purchase it.

This is somewhat of a departure from previous agency writings on FCU investments. NCUA has previously opined that, under the Federal Credit Union Act, FCUs are not permitted to invest in stock unless it is stock from a credit union service organization or necessary to the business of the credit union.

NCUA says it will continue to examine the credit union’s holding of stock from a safety-and-soundness perspective.

NAFCU President Fred Becker informed members of the final legal opinion Thursday afternoon. For the full text of the opinion, use the link below.