The Supervisory Committee: Focusing on Fraud Detection

Guest post by Jay Slagel, Vice President of Risk Management and Claims for Allied Solutions, LLC.

Credit unions have a “watchdog” looking out for their interests, overseeing operations and ensuring their records are maintained with honesty and integrity: the supervisory committee. The committee has a host of tools at its disposal to carry out its purpose. Among them is an annual audit of the credit union.

Information gleaned from this audit assists the committee in evaluating credit union operations and in making recommendations to the board. The supervisory committee may also perform surprise cash counts, review non-financial transactions or reconcile credit union accounts with an eye toward compliance with laws and regulations. All these activities place the committee in a prime position to catch suspicious transactions or behaviors that may indicate fraud.

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10 Best Practices of Compensation Oversight by Your Credit Union Board

Serving on a credit union board has gotten more complicated in recent years, based on new and evolving NCUA requirements for directors.  More specifically, rule 701.4 from NCUA dictates that directors must understand the credit union’s specific financial and accounting activities and their various risks from credit and liquidity to compliance and reputation.  There are many questions on the specifics of the rule and how NCUA plans to measure compliance with it.  You are not alone if you’re wondering “how much training is required?” “what exactly does financial literacy mean to NCUA?” and, most important, “what do the regulators expect?”

A recent webcast we recorded with Jim Patterson, partner with Sherman & Patterson, Ltd. and Jen Jackson, Vice President of Compliance and Information for Burns-Fazzi, Brock, may help shed some light on this topic.  My ears perked up when Jim went through a list of 10 best practices that credit union boards should consider when overseeing compensation. Compensation oversight is an important part of rule 701.4, considering the board sets the compensation of the credit union executives. I love lists, and this one made sense to me in what can sometimes be a mess of fuzzy guidelines.

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The case for credit unions providing their directors long-term care insurance

Guest post by Tom Telford, Executive Vice President, Burns-Fazzi, Brock.

The term “volunteer” exemplifies commitment, impact and shaping a desired outcome through the offering of one’s own ability. For all board members committed to the credit union movement, this means thousands of hours of work to help shape their organizations. With the new regulations from NCUA regarding fiduciary duties, the responsibilities and expectations of credit union directors have multiplied.

The position of board member in for-profit sectors typically equates to monetary rewards for service. In the credit union industry, most forms of “compensation” are not allowed under NCUA guidelines.

NCUA regulation section 701.33 prohibits compensation to more than one board officer but allows a federal credit union to provide all directors with reasonable health, accident and other related types of personal insurance protection subject to numerous restrictions.

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