ALEXANDRIA, Va. — Board members of federal credit unions will only get limited exemption from being sued for some of their actions and will have to gain proficiency reading balance sheets if they don't already have it, according to regulations approved by the NCUA today.
Within six months of joining an FCU's board-which NCUA changed from its initial proposal of three months following complaints in some comment letters-volunteers would have to develop a level of financial proficiency, which includes basic finance and accounting proficiency. This training can be done by credit union employees, outside sources or, in the case of small credit unions, the NCUA's Office of Small Credit Union Initiatives.
The rule also makes changes on the rules for converting from banks to credit unions. It mandates that in such cases the credit unions must break down the costs of converting and distribute it to members and provide "complete and accurate" information about possible changes in service, such as branch closings or access to a shared branching network.
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In addition, FCUs seeking to convert to banks would have to get an independent evaluation and board members and employees couldn't assist members in filling out ballots during conversion votes. The voting must be conducted in secret and tallied by an independent entity without publishing preliminary vote tallies.
The NCUA Board approved the regulatory change 2-1 with Board Member Gigi Hyland opposing it saying she favored the goals but the methodology adds to the regulatory burden for credit unions and could cause additional confusion.
The Board also sent out for comment a proposed rule change that would
require that credit unions include the fact that they are insured in all radio and television advertisements-including those under 30 seconds–and in annual reports and other legally mandatory publications.
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