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A Direct Line Blog

Addressing Conflicts of Interest

May 22, 2024 7:30 am

By Donya Parrish, MCU VP Risk Management

As a board member or employee of a credit union, each of you has the opportunity for influence. Knowing when to draw the line if it becomes a conflict of interest between your personal benefit and the best interest of the credit union is a critical ethics consideration.

Every now and then, a well-meaning realtor brings in a gift to thank an employee for the help they gave their client during a loan process. Can the employee accept it? Or a member brings homemade baked goods to their favorite teller — is that OK? What about providing your board members credit union logo wear the meeting after they approve a salary increase for the CEO — is that acceptable? Maybe, but each scenario depends on the relationships between the parties, dollar amounts involved, and the influence gained because of the transaction.

You should consider having a policy that defines conflicts of interest and what is acceptable as well as a process for any questions that come up so management and staff have clear direction on what is and what is not appropriate or allowed. America’s Credit Unions just wrote a thorough and helpful blog on The Bank Bribery Act that addresses many of the facets of the questions. In it, author Nancy DeGrandi notes that NCUA released guidelines in 1987 that “encourages federally insured credit unions to adopt codes of conduct or written policies that cover the conflict-of-interest prohibitions of bank bribery law.”

If you are looking for a sample policy on this issue, don’t forget that we provide access to CU PolicyPro for your credit union as part of your dues. That system has a Conflict of Interest policy #1620 available for your use. If you prefer that I send it to you via email, that might cost you. Did I mention that I like cookies? I hope that’s not against policy!

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