By Donya Parrish, MCU VP- Risk Management
Did that get your attention? The NCUA Board made a move at last week’s board meeting that impacts federal credit unions, but should be on the radar of all credit unions… they proposed a rule to require boards of directors to “establish and adhere to processes for succession planning.”
The agency has pushed credit unions of all sizes for years to consider the future of the credit union, not just when a manager or CEO plans retirement, but also for board seats, supervisory committee members, key employees, or in the event of an unforeseen event that could leave the credit union without leadership and the knowledge needed to run the institution. In approving the proposed rule, NCUA Chairman Harper noted that the rule is about federal credit unions of all sizes, but “[s]mall credit unions are at the heart of the movement, and we need to find a better way to preserve them, instead of consolidating them.”
It is no secret that many small credit unions are fully dependent on their manager to wear multiple hats and that they often fail to plan for replacement until it is too late. That leads to mergers of need and not mergers that truly benefit the community and members. So, while I don’t think NCUA is anti-merger, I think they are working to ensure that they occur when it makes sense, not because of a lack of planning and foresight.
We will keep you posted as the proposal moves forward so you can be in compliance when it is effective. If you would like to comment or offer us thoughts on the proposal, please contact our SVP/Chief Advocacy Officer Karen Smith.
In addition, we are hosting a session for you on April 4 at 3:00 pm MDT with Jim Kasch the topic of Succession Planning to help your board and credit union move forward. Stay tuned for details, but mark your calendars! He is a great speaker and we are excited to have his expertise.