Board Education Rule Effective In January, Compliance By July
ALEXANDRIA, Va.-NCUA announced that its rule related to credit union board duties and requirements will be implemented in January, with compliance with the financial literacy provision required by July.
Directors elected or appointed on or before Jan. 27, 2011, including those directors serving prior to NCUA finalization of the rule, must be in compliance with the financial literacy requirements by July 27, 2011. Directors elected or appointed after Jan. 27 must satisfy the financial literacy requirements within six months following seating.
As part of the financial literacy requirements, all FCU directors, including existing directors, must have the ability to read and understand a credit union balance sheet and income statement. Specifically, the new rule states: "Each FCU director has the duty to... At the time of election or appointment, or within a reasonable time thereafter, not to exceed six months, have at least a working familiarity with basic finance and accounting practices, including the ability to read and understand the Federal credit union's balance sheet and income statement and to ask, as appropriate, substantive questions of management and the internal and external auditors...."