DFI Issues Final Rule for Reasonable Compensation of Directors and Supervisory Committee Members
January 28, 2014
Jan. 28, 2014
The Washington state Department of Financial Institutions has released DCU Bulletin B-14-03, which discusses the DFI’s final rule on reasonable compensation. Washington state-chartered credit unions were authorized to pay reasonable compensation to their directors and supervisory committee members per RCW 31.12.365.
The DFI’s rule creates a new section of credit union corporate governance under WAC 208-400 that credit unions will want to review and take steps to comply with if they plan to pay compensation to their directors or supervisory committee members.
Reasonable compensation is defined as compensation that is:
- Proportional to the services provided by the director or supervisory committee member;
- Reasonable considering the financial condition of the credit union; and
- Comparable to compensation paid by comparable organizations of similar size, location, and operational complexity.
A Washington state-chartered credit union is required to provide written notice to the Director of Credit Unions of its intent to adopt a policy to compensate directors or supervisory committee members at least 60 days before adopting such a policy. The written notice should state the date the compensation policy was approved by its directors and the date of the first payment of compensation. The written notice is a public document.
The final rule will be effective on Feb. 23.
Questions? Contact the Compliance Hotline: 1.800.546.4465, firstname.lastname@example.org.
Posted in Compliance.