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U.S. Securities and Exchange Commission

Securities Act of 1933
Section 2(a)(1)

January 3, 2011

Response of the Office of Chief Counsel
Division of Corporation Finance


National Consumer Cooperative Bank
Incoming letter dated December 14, 2010

Based on the facts presented, the Division’s views are as follows. Capitalized terms have the same meanings as defined in your letter.

The Division will not recommend enforcement action to the Commission if NCB, in reliance on your opinion of counsel that the Class C stock is not a security under the 1933 Act or the 1934 Act, offers and sells the Class C stock without compliance with the registration requirements of the 1933 Act or the 1934 Act and stops filing periodic and current reports under the 1934 Act. In reaching this position, we note that:

  • NCB is a Congressionally-chartered, member-owned cooperative with the stated purpose of providing financial and technical assistance to its cooperative members;
  • NCB will issue the Class C stock only as part of its patronage refund, and for no other purpose;
  • the Class C stock evidences membership in the cooperative and does not provide for ordinary dividend rights;
  • the only holders of the Class C stock are and will be cooperative borrowers, organizations eligible to borrow, or organizations controlled by such borrowers;
  • the Class C stock can be transferred only to another borrower, eligible borrower, or organization controlled by such borrower, and then only with the approval of NCB;
  • the Class C stock can be transferred only for an amount equal to its par value, thereby precluding a profit on its sale;
  • NCB is subject to an alternative regulatory scheme; and
  • NCB provides information to its shareholders through means other than 1934 Act reporting and will continue to do so.

This position is based upon the representations made to the Division in your letter. Any different facts or conditions might require the Division to reach a different conclusion. Further, this response expresses the Division’s position on enforcement action only and does not express any legal conclusions on the question presented.


Kim McManus
Special Counsel

Incoming Letter:

The Incoming Letter is in Acrobat format.


Modified: 01/04/2011