NWCUA’s Stang Meets NCUA Chairman Matz, Hands Over Industry Letter
February 1, 2011
March 10, 2011
Northwest Credit Union Association (NWCUA) President Troy Stang met with National Credit Union Administration Chairman Debbie Matz and hand delivered a letter signed by NWCUA and multiple credit union trade groups, representing over 18 million members and $210 billion in assets, addressing numerous concerns around increasing regulation around the role and responsibilities of volunteer board members.
One of the concerns addressed to Chairman Matz was a letter NCUA intended to help provide guidance on their final rule on board fiduciary duty. However, it seemed to cause more confusion around the role of boards of directors and their ability to delegate operational authority. The NCUA letter, 11-FCU-02, stated that the board of directors “must directly exercise its authority to hire, fire, determine duties, set compensation and discipline senior management,” which caused serious concerns.
To clarify this point, NCUA stated that the recent guidance was not intended to require changes around the fiduciary role of the board. These oversight duties may still be delegated to an executive committee or CEO when appropriate, leaving the board responsible for the overall health of the institution and personnel matters relating to designated credit union leadership.
We appreciate and support this clarification. Still, additional directives of concern have called into question the allegiance of board members – whether their ultimate responsibility is to the member or the institution – and given NCUA the ability to oversee indemnity payments, when they will and will not be issued.
We will continue to monitor as more regulations are issued around the function and protection of boards and volunteers and hope to see more positive clarifications from NCUA. It is increasingly important that we ensure the ability to recruit and maintain skilled and engaged board members and not regulate away those who would otherwise choose to serve.