New NCUA Rule Raises Question
ARLINGTON, Va. – NCUA’s recently issued fiduciary duties rule is unclear on a very important point, notes Anthony Demangone, NAFCU director of regulatory compliance.
Demangone, on NAFCU’s Compliance Blog, pointed out that NCUA’s new fiduciary duties rule requires that new directors obtain a basic level of financial literacy within six months of election or appointment. “When the rule becomes effective, it is easy enough to identify those new directors. But what about existing directors? Are they grandfathered? The rule is silent on this issue.”
Demangone stated that NCUA has indicated it will issue additional guidance in the near future to clarify expectations. “On one hand, we can wait for further guidance. On the other hand, if your federal credit union has a director who does not feel comfortable reading financial reports or does not understand basic accounting, what are you waiting for?”