A bill (HB813) in the Virginia legislature will permit Virginia state chartered credit unions to pay members of the board of directors and credit and supervisory committees.
The bill would require the board of directors to develop a written policy regarding compensation.
Total annual compensation to individual board or committee members cannot exceed $6,000.
The bill excludes accident, health, and term life insurance for a director or committee member will not be considered compensation.
Also, directors and committee members may be reimbursed for expenses, while on official credit union business.
The bill unanimously passed the Virginia House of Delegates.
Read more.
Showing posts with label Board of Directors. Show all posts
Showing posts with label Board of Directors. Show all posts
Tuesday, February 11, 2020
Tuesday, October 15, 2019
Unsealed Complaint: CU Board Members Incurred Significant Expenses
An unsealed complaint states that multiple Board members at Municipal Credit Union (New York, NY), including Sylvia Ash, regularly incurred significant expenses each year paid by the credit union.
These expenses included conferences at foreign destinations, food and drink, and donations to charitable organizations of their choice.
The complaint states that Ash between 2012 and 2016 received annually tens of thousands of dollars in reimbursements and other benefits from the credit union.
Ash, who is charged with obstructing a Federal probe of Kam Wong the former CEO of Municipal CU, served on Municipal CU's Board from 2008 until she resigned on about August 15, 2016. From about May 2015 until her resignation, Ash was the Chair of the credit union's Board.
Kam Wong on December 2, 2018 pled guilty to embezzlement and impeding a criminal investigation into the embezzlement.
Pages 7 and 8 of the complaint outlined the benefits and gifts received by Ash.
For example, in 2015 Municipal Credit Union spent approximately $63,408 for the benefit of or at the direction of Ash. These expenses included airfare and hotels at multiple conferences for her and a guest in Cancun, Greek Isles, and San Juan. The credit union also paid for tickets to sporting events for Ash. in addition, Municipal Credit Union paid her phone and cable bills.
Even after she left the credit union Board, Ash continued to have her expenses paid by the credit union.
In October 2016, she attended a credit union conference in Las Vegas. The credit union paid her and a guest's expenses including 3 tickets to a Brittany Spear's concert.
In June 2017, Ash was a guest of another credit union Board member for a conference in Cuba of the Caribbean Confederation of Credit Unions. Her expenses were picked up by the credit union.
While Ash and her fellow board members were not paid, they were handsomely rewarded with significant in-kind benefits.
This is probably not an isolated instance. Credit union regulators need to examine the corporate governance practices of credit unions to ensure that credit union officials are not incurring excessive expenses.
Read the complaint.
These expenses included conferences at foreign destinations, food and drink, and donations to charitable organizations of their choice.
The complaint states that Ash between 2012 and 2016 received annually tens of thousands of dollars in reimbursements and other benefits from the credit union.
Ash, who is charged with obstructing a Federal probe of Kam Wong the former CEO of Municipal CU, served on Municipal CU's Board from 2008 until she resigned on about August 15, 2016. From about May 2015 until her resignation, Ash was the Chair of the credit union's Board.
Kam Wong on December 2, 2018 pled guilty to embezzlement and impeding a criminal investigation into the embezzlement.
Pages 7 and 8 of the complaint outlined the benefits and gifts received by Ash.
For example, in 2015 Municipal Credit Union spent approximately $63,408 for the benefit of or at the direction of Ash. These expenses included airfare and hotels at multiple conferences for her and a guest in Cancun, Greek Isles, and San Juan. The credit union also paid for tickets to sporting events for Ash. in addition, Municipal Credit Union paid her phone and cable bills.
Even after she left the credit union Board, Ash continued to have her expenses paid by the credit union.
In October 2016, she attended a credit union conference in Las Vegas. The credit union paid her and a guest's expenses including 3 tickets to a Brittany Spear's concert.
In June 2017, Ash was a guest of another credit union Board member for a conference in Cuba of the Caribbean Confederation of Credit Unions. Her expenses were picked up by the credit union.
While Ash and her fellow board members were not paid, they were handsomely rewarded with significant in-kind benefits.
This is probably not an isolated instance. Credit union regulators need to examine the corporate governance practices of credit unions to ensure that credit union officials are not incurring excessive expenses.
Read the complaint.
Monday, December 3, 2018
Healthy Corporate Governance?
Does your credit union have a healthy corporate governance?
Sarah Moore, Administrator for the Alabama Credit Union Administration, posed the following questions in a November 9 presentation that should be addressed by members of a credit union's Board and supervisory committee regarding healthy corporate governance practices.
Below is a link to her presentation.
View presentation.
Sarah Moore, Administrator for the Alabama Credit Union Administration, posed the following questions in a November 9 presentation that should be addressed by members of a credit union's Board and supervisory committee regarding healthy corporate governance practices.
- Is the Board performing an evaluation of themselves?
- Does the Board have goals and metrics by which to evaluate the Board performance?
- Does the Board review the mission statement of the credit union annually?
- Do the members of the Board reflect the member base of the credit union, specifically race, gender, age, employer (particularly for SEG groups)?
- Are Board members rewarding themselves through international or luxury training trips or other perks not available to other members of the credit union?
- Are committees, other than Supervisory Committee, acting with specific authority from the board?
- Are committee minutes included in Board packages each month?
- Are committee chairs reporting substantive information to the Board? If there is a “no report” from a committee chair, why?
- Do the bylaws contain term limits for Board members and Supervisory Committee members?
- Do the bylaws contain an age limit in order to run for another term of office?
- Is the Board actively soliciting and recruiting new Board and committee members to run for office?
- Are the bylaws of the credit union up to date with laws and regulations?
- Is the Supervisory Committee actively engaged in audits of the activities of the credit union?
- Is the Supervisory Committee serving as a check on the Board of Directors?
- Are the Board and Supervisory committee reviewing items in enough detail to be an independent check on management?
- Does the Board have a strong conflict of interest policy? Is the policy being adhered to and who is checking to ensure that the policy is adhered to?
- Do Board and Supervisory Committee members maintain their personal finances in good order?
Below is a link to her presentation.
View presentation.
Monday, November 19, 2018
International Training Trips May Signal a Corporate Governance Problem
If your credit union board members are rewarding themselves through international or luxury training trips or other perks that are not available to other members of the credit union, your credit union may have a corporate governance problem.
At least that is the opinion of Sarah Moore, the Administrator of the Alabama Credit Union Administration.
During the November 9, 2018 presentation to the League of Southeastern Credit Unions, Ms. Moore discussed a corporate governance health checklist for credit union boards and supervisory committees.
She posed the following question:
There is a whole industry catering to the education of credit union leaders and their elected boards.
However, some of these training programs are on luxury cruises or at exotic locations.
For example, the Credit Union National Association's Volunteer Conference will meet in January 2019 at Montego Bay, Jamaica. Educruises is promoting a Seine River Cruise in June of next year or a voyage of the Norwegian fjords in July 2019.
These look like junkets rewarding credit union officials and volunteers.
At least that is the opinion of Sarah Moore, the Administrator of the Alabama Credit Union Administration.
During the November 9, 2018 presentation to the League of Southeastern Credit Unions, Ms. Moore discussed a corporate governance health checklist for credit union boards and supervisory committees.
She posed the following question:
Are Board members rewarding themselves through international or luxury training trips or other perks not available to other members of the credit union?If your credit union answered yes to this question, this could indicate an unhealthy corporate governance at your credit union.
There is a whole industry catering to the education of credit union leaders and their elected boards.
However, some of these training programs are on luxury cruises or at exotic locations.
For example, the Credit Union National Association's Volunteer Conference will meet in January 2019 at Montego Bay, Jamaica. Educruises is promoting a Seine River Cruise in June of next year or a voyage of the Norwegian fjords in July 2019.
These look like junkets rewarding credit union officials and volunteers.
Friday, February 23, 2018
Credit Management Information System
A critical part of credit risk management is the ability to identify credit risk.
An article in the Federal Deposit Insurance Corporation's Supervisory Insights looks at credit management information systems. The article argues that a comprehensive credit management information system needs to employ forward-looking risk indicators, just not lagging risk indicators.
Lagging risk indicators include merics, such as charge-off rates, delinquency rates, and restructured loans.
According to the article, relying too heavily on "lagging risk indicators can result in inadequate risk identification and lead to decisions based on an incomplete understanding of the risks facing the institution."
Forward-looking indicators, however, proactively assess risks.
Examples of forward-looking risk indicators for retail loans include tracking production and portfolio trends by product, loan-to-value ratio, debt-to-income ratio, lien position, and credit scores.
The article has a table of forward-looking credit metrics for both commercial and retail loans.
To be effective, these reports need to be received on a timely basis, should include trend analysis, and should not rely to heavily on averages.
In conclusion, a forward-looking credit management information system is an important component of a strong governance structure.
Read the article.
An article in the Federal Deposit Insurance Corporation's Supervisory Insights looks at credit management information systems. The article argues that a comprehensive credit management information system needs to employ forward-looking risk indicators, just not lagging risk indicators.
Lagging risk indicators include merics, such as charge-off rates, delinquency rates, and restructured loans.
According to the article, relying too heavily on "lagging risk indicators can result in inadequate risk identification and lead to decisions based on an incomplete understanding of the risks facing the institution."
Forward-looking indicators, however, proactively assess risks.
Examples of forward-looking risk indicators for retail loans include tracking production and portfolio trends by product, loan-to-value ratio, debt-to-income ratio, lien position, and credit scores.
The article has a table of forward-looking credit metrics for both commercial and retail loans.
To be effective, these reports need to be received on a timely basis, should include trend analysis, and should not rely to heavily on averages.
In conclusion, a forward-looking credit management information system is an important component of a strong governance structure.
Read the article.
Tuesday, July 19, 2016
Diversity and Corporate Governance
Federal regulators and policymakers want to increase the level of diversity at financial institutions, including their boards.
Beginning in 2010, Section 342 of the Dodd Frank Act created the Office of Minority and Women Inclusion (OMWI). One of the goals of OMWI was to assess the diversity policies and practices of entities regulated by the various federal agencies.
In 2015, federal bank regulators and the Securities and Exchange Commission issued a final rule establishing standards for regulated entities to create and strengthen their diversity policies and practices — including their organizational commitment to diversity, workforce and employment practices, procurement and business practices, and practices to promote transparency of organizational diversity and inclusion within the entities' U.S. operations.
NCUA as part of this final rule issued a voluntary self-assessment checklist that provides credit unions with best practices for assessing their diversity policies and practices.
However, my experience is that voluntary best practices tend to become what is expected by examiners.
In a June 2016 speech, Securities and Exchange Commission (SEC) Chairman Mary Jo White stated that "the low level of board diversity in the United States is unacceptable." She believes increasing board diversity is the right thing to do.
To address the issue of board diversity, Chairman White stated that the agency staff are working on a proposed rule that would require public companies to include in their proxy statement “meaningful disclosures” of the race, sex and ethnicity of their board members and board nominees. Chairman White commented that the disclosures would be based on voluntary self-reporting by directors.
While SEC regulations do not apply to credit unions, I suspect that it is only a matter of time before credit unions, as well as other non-publicly traded financial institutions, would be subject to such disclosure about board members and nominees, as it would be viewed as good corporate governance.
While greater board diversity is a positive, having the federal government mandate it is not.
Beginning in 2010, Section 342 of the Dodd Frank Act created the Office of Minority and Women Inclusion (OMWI). One of the goals of OMWI was to assess the diversity policies and practices of entities regulated by the various federal agencies.
In 2015, federal bank regulators and the Securities and Exchange Commission issued a final rule establishing standards for regulated entities to create and strengthen their diversity policies and practices — including their organizational commitment to diversity, workforce and employment practices, procurement and business practices, and practices to promote transparency of organizational diversity and inclusion within the entities' U.S. operations.
NCUA as part of this final rule issued a voluntary self-assessment checklist that provides credit unions with best practices for assessing their diversity policies and practices.
However, my experience is that voluntary best practices tend to become what is expected by examiners.
In a June 2016 speech, Securities and Exchange Commission (SEC) Chairman Mary Jo White stated that "the low level of board diversity in the United States is unacceptable." She believes increasing board diversity is the right thing to do.
To address the issue of board diversity, Chairman White stated that the agency staff are working on a proposed rule that would require public companies to include in their proxy statement “meaningful disclosures” of the race, sex and ethnicity of their board members and board nominees. Chairman White commented that the disclosures would be based on voluntary self-reporting by directors.
While SEC regulations do not apply to credit unions, I suspect that it is only a matter of time before credit unions, as well as other non-publicly traded financial institutions, would be subject to such disclosure about board members and nominees, as it would be viewed as good corporate governance.
While greater board diversity is a positive, having the federal government mandate it is not.
Monday, January 5, 2015
Filene: Troubling Drift in CU Corporate Governance
In 2010, the Filene Institute released an interesting study on corporate governance at U.S. and Canadian credit unions.
The report found that there "is a troubling drift away from truly cooperative and democratic governance."
The report argued that there is a failure by credit union members, who own the assets, to participate in running their credit unions. It is management that drives the change process at credit unions.
This decline in member involvement has arisen at the same time as the common bond has been diluted. The liberalization of the common bond has fueled credit union membership and asset size growth requiring professional managers.
For example, the study found that less than 1 percent of U.S. credit union members attended the annual general meeting.
The study also found unsurprisingly that for the vast majority of credit unions the number of candidates for the board of directors is the same as the number of vacancies. The authors concluded that "competition for board positions ... is not intense... and once one is nominated, achieving a position on the board is a formality."
The report noted that "poor membership involvement has weakened the accountability structure and widened gaps between the owners of the assets (the membership), the monitors of asset utilization (the board of directors), and the controllers of the assets (management)."
This raises the issue as to whether management's interests is aligned with the interests of the members.
Read the report.
The report found that there "is a troubling drift away from truly cooperative and democratic governance."
The report argued that there is a failure by credit union members, who own the assets, to participate in running their credit unions. It is management that drives the change process at credit unions.
This decline in member involvement has arisen at the same time as the common bond has been diluted. The liberalization of the common bond has fueled credit union membership and asset size growth requiring professional managers.
For example, the study found that less than 1 percent of U.S. credit union members attended the annual general meeting.
The study also found unsurprisingly that for the vast majority of credit unions the number of candidates for the board of directors is the same as the number of vacancies. The authors concluded that "competition for board positions ... is not intense... and once one is nominated, achieving a position on the board is a formality."
The report noted that "poor membership involvement has weakened the accountability structure and widened gaps between the owners of the assets (the membership), the monitors of asset utilization (the board of directors), and the controllers of the assets (management)."
This raises the issue as to whether management's interests is aligned with the interests of the members.
Read the report.
Wednesday, August 6, 2014
Director Liability
Should credit union directors be held professionally liable, if their conduct contributed to the failure of a credit union?
I know that this is a sensitive subject. Credit union advocates will say that since directors are volunteers and most directors are not compensated, it would be unfair to hold them personally liable for a credit union's failure.
However, after reviewing a number of the Material Loss Reviews conducted by NCUA's Inspector General, there is a re-occurring theme that the board of directors were negligent in their oversight of the credit union. These reports note that the board of directors failed to exercise adequate oversight of management and/or exposed the failed credit union to excessively risky business models.
Here are some excerpts from recent Material Loss Reviews.
In the case of the failure of Taupa Lithuanian Credit union, the NCUA Inspector General found that "Taupa’s Board of Directors failed in its duties to adequately oversee the activities of management. During the scope period of our review, multiple examinations identified the need for more consistent Board of Directors meetings and adequate minutes. Examiners cited Board deficiencies in examinations effective June 30, 2006; December 31, 2007; March 31, 2009; June 30, 2010; December 31, 2011; and December 31, 2012."
The Material Loss Review (MLR) for Vensure FCU concluded that "Vensure’s management and Board exposed the credit union to excessive amounts of financial risk due to its affiliation with high risk members and a high risk business model. Specifically, Vensure’s management and Board failed to manage the credit union’s risk related to its ACH payment processing activity for a member that processed payments for internet gambling websites."
NCUA's Inspector General cited weak Board of Directors oversight in the failure of G.I.C. FCU. The MLR reported that "[a]lthough the supervisory committee is the entity charged with primary responsibility over the records of the Credit Union, the Board of Directors acts as control over the supervisory committee by providing a forum for receiving the audit report and minutes of the Committee meetings. We believe G.I.C.’s Board failed in these responsibilities as evidenced by the Board’s failure to keep complete and accurate minutes or to obtain Board packets with information sufficient to execute its duties."
The MLR for Chetco FCU found that the "Board of Directors and management exposed the credit union to excessive amounts of credit and liquidity risk due to its failure to set appropriate limits and maintain the appropriate risk management infrastructure to support the growth in the Member Business Loan (MBL) portfolio."
As these MLRs demonstrate, the actions of these directors contributed to the failures of these credit unions.
NCUA has the authority to pursue these credit union directors, as well as officers, if their gross negligence led to the demise of the credit union. However, outside of a lawsuit suing the directors of WesCorp, it is unclear whether NCUA has chosen to exercise this power.
At a minimum, NCUA's Office of the Inspector General should conduct a study, just like the study performed by the Inspector Generals for the federal banking agencies, on enforcement actions and professional liabilities claims against institution-affiliated parties and individuals associated with failed institutions.
I know that this is a sensitive subject. Credit union advocates will say that since directors are volunteers and most directors are not compensated, it would be unfair to hold them personally liable for a credit union's failure.
However, after reviewing a number of the Material Loss Reviews conducted by NCUA's Inspector General, there is a re-occurring theme that the board of directors were negligent in their oversight of the credit union. These reports note that the board of directors failed to exercise adequate oversight of management and/or exposed the failed credit union to excessively risky business models.
Here are some excerpts from recent Material Loss Reviews.
In the case of the failure of Taupa Lithuanian Credit union, the NCUA Inspector General found that "Taupa’s Board of Directors failed in its duties to adequately oversee the activities of management. During the scope period of our review, multiple examinations identified the need for more consistent Board of Directors meetings and adequate minutes. Examiners cited Board deficiencies in examinations effective June 30, 2006; December 31, 2007; March 31, 2009; June 30, 2010; December 31, 2011; and December 31, 2012."
The Material Loss Review (MLR) for Vensure FCU concluded that "Vensure’s management and Board exposed the credit union to excessive amounts of financial risk due to its affiliation with high risk members and a high risk business model. Specifically, Vensure’s management and Board failed to manage the credit union’s risk related to its ACH payment processing activity for a member that processed payments for internet gambling websites."
NCUA's Inspector General cited weak Board of Directors oversight in the failure of G.I.C. FCU. The MLR reported that "[a]lthough the supervisory committee is the entity charged with primary responsibility over the records of the Credit Union, the Board of Directors acts as control over the supervisory committee by providing a forum for receiving the audit report and minutes of the Committee meetings. We believe G.I.C.’s Board failed in these responsibilities as evidenced by the Board’s failure to keep complete and accurate minutes or to obtain Board packets with information sufficient to execute its duties."
The MLR for Chetco FCU found that the "Board of Directors and management exposed the credit union to excessive amounts of credit and liquidity risk due to its failure to set appropriate limits and maintain the appropriate risk management infrastructure to support the growth in the Member Business Loan (MBL) portfolio."
As these MLRs demonstrate, the actions of these directors contributed to the failures of these credit unions.
NCUA has the authority to pursue these credit union directors, as well as officers, if their gross negligence led to the demise of the credit union. However, outside of a lawsuit suing the directors of WesCorp, it is unclear whether NCUA has chosen to exercise this power.
At a minimum, NCUA's Office of the Inspector General should conduct a study, just like the study performed by the Inspector Generals for the federal banking agencies, on enforcement actions and professional liabilities claims against institution-affiliated parties and individuals associated with failed institutions.
Monday, April 29, 2013
Reimbursing Directors for Lost Wages Is Pay
The Credit Union National Association (CUNA) is requesting that Congress permit federal credit unions to reimburse credit union board volunteers for wages they otherwise forfeit by participating in credit union affairs.
CUNA stated that permitting "credit unions to reimburse directors for lost wages resulting from carrying out their board duties would help encourage interest and involvement in credit union boards of directors. Whether or not a volunteer attends a meeting or training session is sometimes determined by whether or not the director will have to miss work and not be paid."
Reimbursing board members for lost wages is the same as paying board members. Once paid, they would no longer be volunteers.
According to my American Heritage College Dictionary, "to volunteer" means to do helpful work without pay.
CUNA stated that permitting "credit unions to reimburse directors for lost wages resulting from carrying out their board duties would help encourage interest and involvement in credit union boards of directors. Whether or not a volunteer attends a meeting or training session is sometimes determined by whether or not the director will have to miss work and not be paid."
Reimbursing board members for lost wages is the same as paying board members. Once paid, they would no longer be volunteers.
According to my American Heritage College Dictionary, "to volunteer" means to do helpful work without pay.
Thursday, March 28, 2013
Compensation of Trumark Financial's Directors Up by Almost 29 Percent in 2011
The Form 990s for Trumark Financial Credit Union in Philadlphia, PA showed that director compensation increased by almost 29 percent between 2010 and 2011.
The total compensation for the 9 member board increased from $351,468 in 2010 to $452,567 in 2011. The average compensation went up from $39,052 in 2010 to $50,285 in 2011.
2011 compensation of board members ranged from a low of $33,474 to a high of $65,836.
Pennsylvania is one of several states that allows state-chartered credit unions to compensate their board members.
The total compensation for the 9 member board increased from $351,468 in 2010 to $452,567 in 2011. The average compensation went up from $39,052 in 2010 to $50,285 in 2011.
2011 compensation of board members ranged from a low of $33,474 to a high of $65,836.
Pennsylvania is one of several states that allows state-chartered credit unions to compensate their board members.
Sunday, February 24, 2013
State Regulator Suppresses Member Insurrection
Iowa's superintendent of credit unions, JoAnn Johnson (the former Chairman of NCUA), has invalidated a board and management shake-up at Family Community Credit Union in Charles City.
At an annual meeting of the Family Community Credit Union, members voted to dismiss the board of directors, to suspend CEO Dawn Swaningson, to reinstate staff members who had quit in protest of their treatment by Swaningson, and to appoint a new board and CEO.
But JoAnn Johnson wrote the members that their actions "were not in compliance with the bylaws of the credit union, or with the Iowa Credit Union Act."
I suspect that this is not the end of the story.
Read the story.
At an annual meeting of the Family Community Credit Union, members voted to dismiss the board of directors, to suspend CEO Dawn Swaningson, to reinstate staff members who had quit in protest of their treatment by Swaningson, and to appoint a new board and CEO.
But JoAnn Johnson wrote the members that their actions "were not in compliance with the bylaws of the credit union, or with the Iowa Credit Union Act."
I suspect that this is not the end of the story.
Read the story.
Thursday, April 7, 2011
Update on Hawaii State FCU
On February 3 of this year, I wrote about the controversy surrounding the excessive perks the board members of Hawaii State FCU had awarded to themselves and possible conflicts of interest.
This is a follow up on that earlier post.
Members of the credit union appear to have been fed up with the credit union board of directors and voted to oust the board chair Beverly Ing Lee, whose travel agency arranged official board trips frequently at ticket prices higher than what the airlines offered.
Read the story about the election.
This is a follow up on that earlier post.
Members of the credit union appear to have been fed up with the credit union board of directors and voted to oust the board chair Beverly Ing Lee, whose travel agency arranged official board trips frequently at ticket prices higher than what the airlines offered.
Read the story about the election.
Monday, February 28, 2011
Tropical Junket for Credit Union Officials
The Credit Union National Association (CUNA) is advertising that credit union officials can attend an educational junket in the sunny Caribbean.
CUNA will hold its Credit Union Board Financial Literacy Workshop and Volunteer Institute at the Wyndham Sugar Bay Resort and Spa on St. Thomas, Virgin Island. The Workshop starts on April 30 and the Institute runs from May 1 thru May 4.
The cost per night at the resort for a single occupancy room is $295 and for a double occupancy is $390 per night.
Assuming a credit union official attends both the workshop and institute and stays a minimum of five nights (arriving on April 29 and departing on May 4), at a minimum this official will incur resort charges of $1475. This does not count airfare, the cost of registering for the event, and other expenses.
I'm not opposed to educating credit union officials, but does it have to be at a Caribbean resort?
Credit unions receive a very valuable benefit in their corporate tax exemption. This exemption should not pay for junkets to the tropics for credit union directors and officials.
CUNA will hold its Credit Union Board Financial Literacy Workshop and Volunteer Institute at the Wyndham Sugar Bay Resort and Spa on St. Thomas, Virgin Island. The Workshop starts on April 30 and the Institute runs from May 1 thru May 4.
The cost per night at the resort for a single occupancy room is $295 and for a double occupancy is $390 per night.
Assuming a credit union official attends both the workshop and institute and stays a minimum of five nights (arriving on April 29 and departing on May 4), at a minimum this official will incur resort charges of $1475. This does not count airfare, the cost of registering for the event, and other expenses.
I'm not opposed to educating credit union officials, but does it have to be at a Caribbean resort?
Credit unions receive a very valuable benefit in their corporate tax exemption. This exemption should not pay for junkets to the tropics for credit union directors and officials.
Monday, February 7, 2011
Follow Up: Hawaii State FCU Directors Agree to Cut Their Benefits
In the wake of member criticism, the directors for the Hawaii State Federal Credit Union, the state's second largest, agreed to cut the benefits they give themselves. Read the article in the Honolulu Star Advertiser.
On February 3, I wrote about an investigative article appearing in Honolulu Star Advertiser about excessive perks the board members of Hawaii State FCU had awarded to themselves and possible conflicts of interest.
On February 3, I wrote about an investigative article appearing in Honolulu Star Advertiser about excessive perks the board members of Hawaii State FCU had awarded to themselves and possible conflicts of interest.
Thursday, February 3, 2011
Article Exposes Concerns About Excessive Benefits and Conflicts of Interest at Hawaii State FCU
An article appearing in the January 30, 2011 Honolulu Star Advertiser reports on potential conflicts of interest and excessive benefits to the board members of Hawaii State Federal Credit Union, the second largest credit union in the state.
The article cites as examples of excessive benefits that the credit union pays for up to seven off-island trips annually for each board member with up to four trips to the mainland, covers travel expenses for spouses, and reimburses board members for health insurance costs.
Frank Diekmann, editor and publisher of Credit Union Journal, is quoted as saying that these benefits are pretty much in excess of what credit union boards receive regardless of the size of the credit union.
Additionally, according to documents obtained by the newspaper, regulators raised red flags with respect to "the use of a travel agency owned by the board chairwoman to book official trips, frequently at higher prices than what the airlines offered directly, and accepting free rooms at a Waikiki hotel where the annual membership meetings were held."
To read the article, click here.
Read editorial Uphold credit union trust
The article cites as examples of excessive benefits that the credit union pays for up to seven off-island trips annually for each board member with up to four trips to the mainland, covers travel expenses for spouses, and reimburses board members for health insurance costs.
Frank Diekmann, editor and publisher of Credit Union Journal, is quoted as saying that these benefits are pretty much in excess of what credit union boards receive regardless of the size of the credit union.
Additionally, according to documents obtained by the newspaper, regulators raised red flags with respect to "the use of a travel agency owned by the board chairwoman to book official trips, frequently at higher prices than what the airlines offered directly, and accepting free rooms at a Waikiki hotel where the annual membership meetings were held."
To read the article, click here.
Read editorial Uphold credit union trust
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