Part-Time Employees may Serve on FCU Board and may Perform Loan Collection Work

ALEXANDRIA, Va.-Part-time federal credit union employees are permitted to serve on a federal credit union’s board of directors so long as the responsibilities as an employee are distinct from that of the board responsibilities, according to a recent NCUA legal opinion letter. The letter came in response to a request from Chetco Federal Credit Union President and CEO Stanley J. Barron on whether the credit union could hire an attorney as a part-time vice president of compliance and general counsel if they are also serving as a board director. NCUA Associate General Counsel Sheila Albin directed Barron to legal opinion letter 91-0610 from June of 1991, which explains that there is no general prohibition on a paid federal credit union employee serving on the board if there is a distinction in responsibilities. Barron also asked if the attorney does loan collection work in the future as part of his employment responsibilities, would the credit union be in violation of NCUA’s prohibition on federal credit union officials or employees receiving compensation in connection with a loan. Albin said that this scenario would be in compliance with NCUA regulation. She pointed out the rule is there to prevent an individual from placing self-interest before the institution’s interest in making good loans. NCUA rules also prohibit a board member who is an attorney from collecting fees for loan collections “since an inclination to increase the amount or volume of potential fees could have an undesirable influence on how the attorney treats lending matters before the board.” However, there is a salaried-employee exception to the prohibition which fits this case as the attorney will be working as a part-time employee of the federal credit union receiving a regular salary as indicated by several facts outlined in the letter and not an independent contractor. -