A Direct Line Blog

By Donya Parrish, MCU VP Risk Management

There is no doubt that credit unions appreciate all the hard work their volunteer board members do. On occasion the question comes up about offering benefits or perks to board members. Both NCUA and the state credit union act are clear that compensation to directors is very limited (by regulation) and anything offered to directors at a better deal than what members are offered is prohibited.

Specific examples that NCUA has written opinion letters on include free safe deposit boxes (nope!), reimbursement for personal computers or equipment used for carrying out the responsibilities of the position (this is allowable), and travel expenses for a travel companion who is not an immediate family member (rejected). The restriction is also commonly interpreted as prohibiting free checks, reduced loan rates, or increased deposit rates that regular members do not receive the benefit of.

You can see in the letters that NCUA references the FCU Act that states, “No member of the board or of any other committee shall, as such, be compensated, except that reasonable health, accident, similar insurance protection, and the reimbursement of reasonable expenses incurred in the execution of the duties of the position shall not be considered compensation.” The Montana Credit Union Act also includes similar language on board member compensation at 32-3-406 M.C.A.

So what is allowed? That is up to the credit union to determine and it should be within your Bank Bribery Act or code of conduct policies. Many credit unions provide logo wear or gift cards of $100 or less to directors with no issue. You can see in this prior blog that anything beyond a “nominal” value gift can be problematic. The good news is that many individuals step up to volunteer with no expectation of anything beyond the success of the credit union. That doesn’t mean they won’t appreciate a sincere “thank you” on occasion!