NCUA Defines Acceptable Value for Service Awards to FCU Directors

A Volunteer Service Award recognizing an individual director’s or committee member’s substantial length of service is permissible under the National Credit Union Administration’s (NCUA) rule limiting compensation of officials (12 C.F.R. 701.33). The award must simply be nominal in value and in proportion to the period of service it recognizes.

So says an NCUA legal opinion letter (No. 11-0805) made public recently. The letter came in response to a letter written by a New York law firm, which asked if Hudson Valley Federal Credit Union’s policy of awarding a $250 gift card is permissible under the rule. In that letter, the NCUA declared that the value of this type of award, based on prior opinions and adjusted for inflation, should be a maximum of $50 per year of service. So, for instance, for a board member who has served for 10 years, an award of $500 would be permissible.

NCUA rules about board compensation apply to federally chartered credit unions only. State chartered credit unions must follow their state’s rules.

Click here to read the letter.

 

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

Posted in Awards, Compliance, NCUA.