Does your credit union need greater board oversight than Walmart?
David Savoie, CEO, LaCorp
Credit union board meetings are required monthly–perhaps too frequently. CEOs, executives and volunteers alike see them partly as formalities. Another long night in the board room when it really could have been an email sometimes.
However, there may be change on the horizon thanks to legislation. However, if this bill has any chance to become law, it will need help getting through the Senate. Be sure to voice your support of the Credit Union Board Modernization Act (H.R. 975) while you’re hiking the hill at GAC.
The Credit Union Board Modernization Act
The Credit Union Board Modernization Act would allow credit union boards to meet as few as six times a year. Currently, credit union boards are required to meet once a month as part of the Federal Credit Union Act.
When the FCU Act passed in 1934, having monthly board meetings made sense as a primary way to stay in contact and ensure everyone was on the same page regarding the running of the credit union. However, thanks to advancing communications technology, the value of frequent board meetings has dramatically diminished.
This is an outdated provision of the Federal Credit Union Act and Bylaws, dating back to before email and video calls. Historically, frequent board meetings were necessary to review loans, new member applications and other operational business of the credit union. Modern boards do not and should not operate like this.
Why This Legislation Matters
The Credit Union Board Modernization Act would bring credit unions in line with modern businesses. For example, Fortune 500 companies only meet once per quarter, while the smallest credit unions, which do not pose a systemic risk, must convene every 30 days. Now, does that make sense?
While the legislation does not reduce the number of meetings to quarterly, which companies such as Walmart and Microsoft enjoy, reducing the required number of board meetings to six brings credit unions more in line with general business practices.
Additionally, fewer board meetings mean more time focused on other mission-critical activities: serving members and the community. This is especially important for smaller credit unions that have limited time, people, and resources. More time devoted to member and community engagement can only help small credit unions grow and develop trust in the long run.
The Credit Union Board Modernization Act has been introduced in the Senate, and if this legislation hopes to pass this chamber of Congress, it needs the support of credit unions behind it. Let your Senators know that this bill allows credit unions to modernize, alleviate the burden on small credit unions, and focus on serving their members and communities members and communities. It’s time to spend less time in the board room and devote more time to being credit unions.
Would you like to work with a corporate credit union that works for your credit union everyday? Contact LaCorp today!