By HEATHER ANDERSON

Credit union chief financial officers are being asked toprovide more reporting and education these days, often to the pointthat it gets in the way of their ability to actively manage theirpositions, said Pam Finch, CFO at Mid Minnesota Federal CreditUnion and chair of CUNA's CFO Council.

Industry losses have put CFOs on the defensive becauseregulators are asking for more detailed information, includingmetrics to support decision making.

“For some CFOs, this can be frustrating because we'vebeen doing our job well for years,” she said. “Rather than witnessthat we're managing risk in the financial reports, regulators nowwant to be shown that we know what we're doing.”

That regulatory scrutiny has spilled over intosupervisory committees and boards, which have significant reportingresponsibilities of their own. Some volunteers weren't “tuned in”to financial reporting before the economy turned south, and otherssimply didn't understand it, she said.

Regardless, concerned board and supervisory committeemembers have turned to CFOs for reassurance and a source ofeducation. Because credit union boards are representative of theirmembership, it's difficult to even find qualified volunteers thathave the experience, education and background required to performat the level expected today, she said.

Most CFOs welcome increased attention from board membersand the chance to provide financial education, Finch said. However,these days CFOs are already stretched to the limit meeting thedemands of regulators, CEOs and their own division's employees andmiddle managers.

The heat isn't hot enough to keep CFOs out of the creditunion kitchen, though. Finch said she hasn't heard any financialexecutives say they fear for their jobs or worry about the legalramifications of fiduciary responsibilities. However, she said shehas noticed an increase in open CFO positions in credit unions andsaid that while some may have lost jobs due to performance, otherfinancial executives are making career moves.

“The hot career tracks really depend upon the times,”Finch said. “It used to be marketing, then it was lending, and nowCFOs are the go-to people for CEO positions now. We're the ones whodig into and understand risk, and the more we know, the more we'relooked to. It's both a blessing and a burden.”

Credit union legal veteran Randy Moore said he has takensome calls from credit union clients concerned about their legalresponsibilities regarding fiduciary duties and losses in the wakeof the lawsuit against current and former employees and directorsof Western Corporate Federal Credit Union. However, the partner inLa Jolla, Calif.-based law firm Moore, Brewer, Jones, Tyler &North said he hasn't seen or heard of situations other than theWesCorp or U.S. Central FCU lawsuits that “suggest we have anythingto be concerned about.”

Directors aren't automatically on the hook for creditunion losses, said Moore, who was formerly CUNA's Washingtoncounsel. Even at WesCorp and U.S. Central, he said there wasn'tanything different that happened there that didn't happen all overthe rest of the financial system.

“The only two differences were that [WesCorp and U.S.Central] were the two largest elements of the credit unionmarketplace; and, I don't mean to suggest anything, but perhapssomething happened there that triggered the NCUA to take control ofthem and not the other corporates,” he said.

Credit union attorney Chris Robbins said his clients arerequesting far more help in default proceedings against borrowersthan defending their balance sheet strategies.

Fiduciary responsibility is “probably a concern” thesedays, he said, but it's more of an economic phenomenon than a legalissue.

“It's very simple. When times are good, members don'tcomplain, but when things turn south, you typically see an increasein complaints against executives and officers in every industry,”Robbins said. “It's just human nature that people get upset whenthey don't get the results they had hoped for.”

Robbins, a partner in the St. Petersburg, Fla.-basedfirm Robbins Equitas, said he performs DNO insurance reviewsannually for his clients, but they haven't requested purchasingadditional coverage nor have insurers asked for more.

“It's still the same problem as always, still the samerisks that have always been there,” he said.

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