Board members of federal credit unions must be able to examine a credit union balance sheet and explain its meaning and importance and must learn how to do that within six months of joining a board, according to a letter to credit unions sent today by NCUA Chairman Debbie Matz.
She wrote that the director should understand if the value of a line item is changing over time and what is the significance of that change. The director must also understand the credit union's activities and both the potential risks and benefits.
In the letter, she emphasized that the agency's goal is not to "increase examiner scrutiny of the financial skills of particular directors. Rather, examiners will evaluate whether the credit union has a policy in place to make available the appropriate training to enhance the financial knowledge of the directors.''
She wrote that the FCU's policy for financial education must include options for training for board members, including funding information and a summary of the timetable required.
The letter implements the regulation that the NCUA Board approved last year.