NCUA FOM – What is meant by “strong dependency relationship” in the new Inclusion of SEG Contractor Rules?

Compliance > NCUA
Q:  What is meant by “strong dependency relationship” in the new Inclusion of SEG Contractor Rules?
 
A:  The rule defines a “strong dependency relationship” between a SEG sponsor and the sponsor’s contractor to mean that both rely on each other as measured by a pattern of regularly doing business with each other.  This can be demonstrated, for example, as documented by the number, the term length and the dollar volume of prior and pending contracts between them.  The ”strong dependency” standard is to be established by credit unions themselves, so as to create a rebuttable presumption that the sponsor’s employees and those of the contractor share a single common bond, as the Federal Credit Union Act requires.        
 
 
 
ADDITIONAL INFORMATION:
This information was obtained from the NCUA’s website, Chartering and Field of Membership Resources page -    https://www.ncua.gov/services/Pages/field-of-membership-chartering.aspx
 

Add Feedback