The tough NCUA financial literacy requirements for credit union volunteer directors came as a loud wake-up call on Jan. 27, 2011. And the provision came with a requirement that all new directors had to gain financial literacy within six months of their election.
Before, many directors thought it wasn't their job to keep tabs on the institution's books. The January bombshell challenged any such complacency.
The NCUA rule defined what it expected from directors. "Each FCU director has the duty to… at the time of election or appointment, or within a reasonable time thereafter, not to exceed six months, have at least a working familiarity with basic finance and accounting practices, including the ability to read and understand the FCU's balance sheet and income statement and to ask, as appropriate, substantive questions of management and the internal and external auditors."
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