Amid the sun, sand and waves on the Wailea Beach of Maui,something evil lurked last week at The Paragon Group's Volunteer Leadership Conference. It wasn'tfar below the serene and relaxed surface and without much effort itmanaged to swallow the ballroom whole. That beast was palpable inthe air. That menace to credit unions is pure frustration.

Perhaps because volunteers are not always as attuned to industrypolitics as the professionals, unadulterated passion ruled the day.Attendees were spitting bullets and seemed ready to pummel variousmatters, and a few people, that got in the way of slaying thebeast.

Students in the session regarding financial essentials forvolunteers were riled at the very thought that the NCUA was requiring them to obtain basic understanding of creditunion balance sheets. Attendees seemed in agreement that trainingwas important, but to have the NCUA demand it raised their hackles.While the regulation and accompanying letter to federal creditunions outlined general duties of a director, there were no popquizzes or testing involved as some had feared.

I have a pretty laissez-faire attitude when it comes togovernment intervention in business and life in general. However,setting this bare minimum standard was imperative following theeconomic meltdown. The regulation really didn't add newresponsibilities for directors that weren't already covered bytheir fiduciary duty. What it did was more clearly define whatconstituted their responsibilities.

The key piece to remember is that the requirements are not onlythere to tell you what to do.

Credit union directors are the strength of the industry whenthey are willing to keep educated and up-to-date with their creditunion and the financial services industry in general.

Improperly trained directors are the downfall of the industry.Yes, there was a time when all you needed to qualify as a directorwas to be a member. This cannot and should not be the case in the21st century.

In the last decade, we've experienced heightened awarenessagainst terrorist financing in the form of tighter Bank Secrecy Actoversight, the evolution of home banking and the birth of mobilebanking. Because Gen X is so small relative to the boomers and GenY, demographics and expected financial behaviors of your membershipare changing rapidly. Studying credit union financials through thisbroader lens is essential, and I don't want a credit union boardmember who will not meet this standard. Should the NCUA require it?No, but the membership through its nominating committee should.That is your fiduciary duty.

Another frustration that was aired and I wholeheartedly agreewith was complaints about the inconsistency across examinations.One instance was shared by a credit union director where examinerstold a credit union to form a committee to oversee all the loansrunning through the credit union, and the next year the examinersasked why the credit union was doing that.

This type of about face is a waste of credit union time andresources. Frustration at what is perceived as busy work can make acompetent, dedicated credit union directors throw their hands up inthe air and wonder, what am I really doing with my time when theregulator does not appear to have a handle on what it expects fromcredit unions?

Representatives from a California credit union explained thatthe NCUA and state examiner conclusions didn't jibe; the stateexaminers found this credit union in better standing than did theNCUA. When all three parties sat down to discuss the matter, thetwo regulators moved farther apart.

Publicly, we're seeing what can happen when the state andfederal regulators go head-to-head in North Carolina. After SECUrevealed its CAMEL score, the NCUA decided that it cannot rely uponthe examinations of the North Carolina regulators and will nowconduct its own examination, which puts an additional expense onthe state-chartered credit unions there.

The NCUA argues that the CAMEL ratings are confidential andreleasing them could threaten all credit unions and the NCUSIF, but the state regulator insists she has authority understate law to permit their release.

While I see both sides of the argument, credit union financialsare already available publicly from the NCUA's own website as wellas in annual reports. Releasing CAMEL ratings would do no more harmthan the financials being available.

Perhaps it is the NCUA that doesn't want its work under scrutinyrather than that of the credit unions. That could be one nastybeast to battle.