MADISON, Wis.-Looking back on NCUA's new financial literacy standards for federal CU board members, Fred Johnson deemed the last 12 months "a good start" at improving director education.
But now it's on to 2012.
The CUES president told Credit Union Journal that the efforts in 2011 have "made strides. But I think this is a baseline. I said earlier in the year it would be nice if we had some standards (
NCUA enacted the rules requiring board members to have a fundamental understanding of credit union financials in the wake of numerous failures and losses among natural-person credit unions.
Johnson had expressed concerns whether the new rule will have a big impact on board knowledge. Directors of federal credit unions elected or appointed on or before Jan. 27, 2011, including those directors serving prior to NCUA finalization of the rule, were required to be in compliance with NCUA's new 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.
The next logical step, according to Johnson, is continuing education. CUES has enhanced its courses for director risk and compliance, as well as for the supervisory committee. "The hope is CEOs see this is something CUES can help them with and is one thing less they have to worry about."
Johnson offered that many CEOs' initial reaction to NCUA's new board literacy standards was, "'Let's not have the regulators look at something else.' Some of the reason for this is that board makeup can be very different. Some boards are filled with CPAs and people who know how to read a financial statement very well. Then you have some boards that are the exact opposite. I think credit unions are making an effort--we had about 1,600 directors sign up for our free financial knowledge course this year."
