BIRMINGHAM, Ala.-Despite some early resistance, Dennis Dollar sees NCUA's director education requirements as a significant step forward for credit unions.
Dollar, principal partner with credit union consultancy Dollar & Associates, told Credit Union Journal "there were those who were critical" of the continuing education requirement when the regulator released it in 2011, "but I believe it has turned out to be a net positive."
"We are seeing more and more of our clients adapt their volunteer education policies and updating them," he reported. "We are seeing more directors participate in training sessions, online Webinars and sessions at conferences."
Travel Cost Increase Hasn't Happened
According to Dollar, one concern expressed when the rule was implemented was the potential for an increase in travel costs as directors attended conferences. There has been a "small increase," he acknowledged, but this has been countered by directors getting educated online.
"I am impressed with attendance at our webinars," he said. "We do three a year for $195, no travel, and for that one price all directors at the credit union can use it. Many ask us to send documentation that they have taken it-all because of the new regulation."
Some directors consider the new requirements to be "burdensome," Dollar acknowledged, before adding, "but continuing education is always burdensome. It is burdensome for attorneys, Realtors and doctors, but it is beneficial. I am not one of those who thinks no good has come about. It has caused every credit union to look at their volunteer training program."
One important consideration is director education policies must be commensurate with the complexity of the credit union. Therefore, Dollar reasoned, a larger credit union with more complex programs has to have directors who are more up to date. He said this fact has forced those credit unions to seriously examine their policies and consider their options, including webinars and podcasts.
One early criticism that was valid, Dollar said, was the requirement directors needed to be able to read a financial statement.
"Most of them were proficient [at reading a financial statement]," he said. "Every director had to take that training that first year, and it was one-size-fits-all. There should have been more flexibility that first year."
As the rule nears the end of the second year, Dollar said the new directive is all directors have to take ongoing training that is commensurate with the complexity of their CU. "Only new board members have to take reading a financial statement. This recognizes credit union directors are able to read a balance sheet," he said.
Asked where there still are holes that need to be addressed, Dollar said what many directors lack is an understanding of recent legal cases on fiduciary responsibility. He said in his classes he describes this as what should or should not be delegated to management.
'Good Has Come Out of It'
"The easiest thing to do is bash NCUA for implementing a rule on these volunteers, but I think some good has come out of it," Dollar said. "At most credit unions many directors were getting continuing education prior to the requirement, but some were not. This regulation is forcing everyone to get continuing education, so those directors who were keeping themselves educated are pretty happy about it because no longer are there others on their board who are not keeping up."
