FLEXIBILITY EVIDENT IN NCUA FIDUCIARY DUTIES LETTER.

Arlington, VA -- The following information was released by the National Association of Federal Credit Unions:

Flexibility sought by NAFCU under NCUA's fiduciary duties regulation is reflected in a Letter to FCUs released Monday by the agency on the requirements of the final rule, including financial literacy for directors.

NAFCU President Fred Becker wrote NCUA Chairman Debbie Matz last week urging that the financial literacy requirement be removed or at least applied in a flexible manner that imposes no special training requirements for directors who already comply.

NCUA, in Letter 11-FCU-02 (attachment), puts this to work, stating, "Sitting directors who already understand their federal credit union's financial and risk controls will not have to do anything further to meet the financial requirements of NCUA's directors' duties rule." It recaps the compliance deadline for meeting the requirements, which is July 27 for anyone seated prior to this Jan. 27 and, for everyone else, within six months after begin seated.

The letter recaps the six basic fiduciary duty provisions of the final rule and explains in plain language what federal credit union directors should know about their credit unions' operations and financial performance. The ability to read and understand the credit union's balance sheet and income statement, and to ask pertinent questions about what is behind the data, are among these.

The director is also expected to know other aspects of the operation, including how it is managed and what members want and need from their credit union, the letter notes.

Examiners will not be looking to evaluate each director's financial skills but will, NCUA writes, look for policies at each federal credit unions that addresses the need for each director to have a basic understanding of credit union finances.

The agency says those policies should address opportunities and funding for directors to acquire needed skills, education alternatives and timeframes for compliance. Education alternatives may, for example, include training from vendors or trade associations, in workshops (which begin March 5) held by NCUA's Office of Small Credit Union Initiatives and NCUA's Internet-based training.

NAFCU has already begun providing such training, having last week held a webcast providing an overview of the fiduciary duties rule and training for the financial literacy requirement. Each participant received NAFCU's Financial Literacy Certificate.

Training at the following will also earn participants a financial literacy certificate:

NAFCU's Online Training;

a March 2 webcast on key ratios;

an April 20 webcast on possible red flags and due diligence for directors;

NAFCU's 30th Annual Volunteers Conference, May 18-29 in Savannah, Ga.;

NAFCU's 44th Annual Conference and Exhibition, June 28-July 2 in San Francisco.

NAFCU educational programs are open to members and nonmembers.