The NCUA rule has set the dates for when federal credit union boards will have to comply with its new director duty regulation.
The regulation will be effective Jan. 27, 2011, and compliance with the financial literacy portion of the rule will be required by July, 27 2011. Directors not elected or appointed until after the Jan. 27 date must satisfy the financial literacy requirements within six months following seating.
The regulation says all FCU directors, including existing directors, must have the ability to read and understand a credit union balance sheet and income statement. "Directors who do not yet have this ability should plan to receive financial literacy training in 2011," NCUA stated. "Training will be available in workshops presented by NCUA's Office of Small Credit Union Initiatives, as well as through private sector providers."
In addition to the financial literacy requirement, Section 701.4 requires that all FCU directors carry out their duties in good faith and in the best interest of the credit union membership.