Washington Regulator, Credit Unions Meet to Discuss “Reasonable Director Compensation”
June 25, 2013
June 25, 2013
Credit union movement leaders and consultants met with the Washington Department of Financial Institutions (DFI) late last week to begin discussions on how “reasonable” director compensation will be defined. It was the first such meeting since the state legislature updated the Credit Union Act, allowing for credit union board pay.
DFI Director Linda Jekel outlined the rulemaking schedule, laid out a transparent process, and informed participants that the DFI’s intent is to have board compensation rulemaking done by the end of the year, with an effective date of Jan. 1, 2014. Jekel acknowledged that credit unions could begin compensating board members by July 28, 2013, but urged participants to at least wait until a proposed rule (CR102) has been issued.
Jekel also asked the Northwest Credit Union Association (NWCUA) to help identify and lead a workgroup to review Washington’s model bylaws which were last updated in 2001. Credit union professionals interested in helping to review the bylaws are invited to email John Trull, director of regulatory advocacy for the NWCUA.
Hal Scoggins, principal attorney at Farleigh Wadda Witt noted “The right balance between guidance and rulemaking was a significant topic of discussion at the meeting, with the majority of participants seeming to be in favor of guidance.”
“Some of the things that guidance may cover are the board nominating process, fair and open elections, verifying election results, and board qualifications,” said Scoggins.
The IRS has issued guidance on what tax exempt organizations should consider when setting executive compensation. Credit unions considering board compensation are encouraged to review the IRS guidance.
The NWCUA Regulatory Advocacy team works with state and federal regulators to help reduce the regulatory burden on credit unions and protect the credit union movement. The Association encourages members to participate in the regulatory process. If you have any questions about these or any regulatory issues, please contact Director of Regulatory Advocacy John Trull at firstname.lastname@example.org, or at 503.350.2209.