Washington Credit Union Leaders Discuss Director Compensation with DFI
August 29, 2013
Aug. 29, 2013
The Washington Department of Financial Institutions (DFI) met with credit union leaders Tuesday for an educational discussion about board compensation reporting requirements. Credit union leaders weighed on what they would like to see included in board compensation rulemaking.
Roger Jones of Shannon and Associates and Wendy Campos of Moss Adams gave an overview of current IRS requirements for compensating boards. They highlighted the importance of reporting all compensation and benefits and accurately reporting the number of hours a director spends doing the job. Under-reporting hours can trigger an IRS flag, Jones and Campos noted, because the compensation seems unreasonable. Additional details on compensation can be found under Internal Revenue Code section 162.
Washington State’s B&O tax reporting requirements were briefly discussed. A more in depth discussion on this topic is expected at the next meeting.
Credit union leaders were on the same page asking:
- That the rules not include a board compensation cap because IRS guidance is clear and the marketplace and credit unions financials are sufficient determinants.
- That the rulemaking process not include guidance, which is not subject to a comment period.
- That balloting and board elections should not be changed in this rule as compensation will be sufficient to get more people involved on boards.
The discussion topic that drew the most interest was standards for disclosure. A number of attendees felt that the 990 was a sufficient disclosure which is publicly available. Other participants wanted additional flexibility to let their membership know about compensation through another avenue, arguing that the 990 is not consumer friendly.
“The comments expressed in the meeting were in line with what the Association has been hearing from our membership,” said John Trull, director of regulatory advocacy for the Northwest Credit Union Association (NWCUA). “Our members want transparency and accountability, along with the flexibility to put in place a compensation program that fits the specific needs of the credit union.”
The next meeting will be on Sept. 26, 2013 from 1:00 p.m. – 3:00 p.m at the DFI’s offices in Tumwater.
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.
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