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MADISON, Wis.-CUES is concerned that NCUA Letter 10-0913 may limit credit unions' ability to provide financial education to associate directors.

In a letter to NCUA General Counsel Robert Fenner, CUES President Fred Johnson expressed concern that the letter dated Oct. 29, 2010, regarding health benefit reimbursement, delineates between voting and non-voting CU board members, stating that non-voting directors are not allowed expense reimbursement or insurance benefits. Johnson pointed out in his correspondence to Fenner that NCUA's letter states, "Given associate directors or director emeriti act in an honorary or advisory capacity, these officials are not entitled to the same benefits as those provided to regular voting committee members that are seated in accordance with the bylaws and charged with the full responsibility of their positions."

"So I pointed out to Mr. Fenner that you have two things working against each other," Johnson told Credit Union Journal. "You say we need to educate directors who are helping the credit union make decisions, and then you turn around and send out a letter like this."

Johnson is concerned the letter sets a bad precedent. "I think this is tip of the iceberg, and credit unions might see this and say now we can't educate our associate directors and director emeriti."

Johnson noted that more credit unions are paying close attention to succession planning and have "board members in waiting. Given the age of some of our board members, the credit union does not want to be unprepared and not have a trained board member ready to step in."

John McKechnie, NCUA director of public and congressional affairs, said the agency is "continuing to review the health benefit reimbursement issue."

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