Section 3- Management Issues Flashcards
Board minutes are used to record actions taken at board meetings. What are the 4 items that should be reflected in the minutes?
- Various committee reports to the board
- Any changes made to policies
- Any follow up actions the board and management have taken to correct problems identified in the last audit and examination
- Regular reports on the ongoing financial condition of the credit union.
What are the two standards used to measure the board of director’s conduct?
- Duty of care- directors must act with due care while developing policy and monitoring credit union operations
- Duty of loyalty- directors are prohibited from using their position as director to gain personal advantage.
The creation of court rulings that protects the BODs by stating that directors are not liable for honest mistakes of judgment if they acted with due care, without a conflict of interest, in good faith, and in furtherance of the CUs purpose is referred to as?
The business judgement rule
NCUA says there are only three eligibility requirements for FCU board membership. What are they?
- Must be a member of the FCU
- Cannot have been convicted of a crime involving dishonesty or breach of trust
- The bylaws allow the board to set a minimum age requirement.
What is the one mandatory ongoing committee that a federal credit union must maintain?
Supervisory committee
The FCU Bylaws stipulate that specific groups must have access to the CUs books and records. What are the 5 groups named in the bylaws?
Members of the BOD, the supervisory committee, the credit committee, the nominating committee, and the executive committee.
Can a CU’s CEO/manager serve on the board of directors?
Yes
According to the FCU Act, what must a CU do to expel a member?
A member may be expelled by a two-thirds vote of the members of the FCU present at a special meeting called for that purpose, but only after the member has had the opportunity to be heard.
How often does the NCUA records preservation program require federally insured CUs to store their records?
Every three months
Four risk factors that the BODs investment policy must address?
How the FCU will manage: interest rate risk, liquidity risk, credit risk, and concentration risk.
Who is prohibited from reaping any personal gain from investment activities of the CU? (5)
Directors, investment committee members, the investment officer, senior employees, and any family members of these people.
What does NCUA require a credit union to analyze about the broker-dealers and safekeepers it relies upon?
The background, enforcement history, financial condition and other relevant information they rely upon in their investment program.
