Credit Unions May Be Not-for-Profit, But They Aren't Charities
Credit unions are very proud of their heritage, and they should be. Credit unions, individually and as an industry, grew from nothing to serve tens of millions of members nationwide. But as the financial services industry overall has evolved, so too should some of the things credit unions were built upon.
What many have widely considered one of the underpinnings of the industry, volunteer boards of directors, should be a thing of the past. When credit unions began in the United States they took savings deposits and made some small loans. Credit unions are not so simple these days.
Fiduciary duty and duty of care have been a matter of theoretical debate. In the wake of international financial crisis, regulators are looking to define more clearly for financial institutions what these terms mean. To accomplish that, certain bare minimum standards must be set. We've seen this with the NCUA's move toward basic financial education requirements for credit unions.
It's difficult to recruit board members for credit unions. Serving on a credit union board is a big time commitment and personal liability to take on as a volunteer, which is precisely the argument some are making. There's an attitude from some portraying, 'we're volunteers, so what do you want from us?'