Management Issuses Flashcards
Board minutes are important documents that record all the actions taken in board meetings and should be complete and a current list. What are the items these minutes should reflect.
The board minutes should reflect the following items. Various committee reports to the board. Any changes made to policies any follow-up actions to the board that management have taken to correct problems identified in the last audit and examination and regular reports on the ongoing financial condition of the credit union 
All members of a credit unions, Board of Directors are subject to the principles of fiduciary duty. What are the two standards by which a directors conduct is measured and how does the business judgment rule protect him or her from liability? 
The duties standards used to measure directors, conduct are 1-duty of care directors must act with due care while developing policy and monitoring credit union operations, and duty of loyalty directors are prohibited from using their position as Director to gain personal advantage
The business judgment rule is a creation of court rulings, stating that directors are not liable for honest mistakes of judgment, if they act with do care without a conflict of interest in good faith, and in furtherance of the credit unions purpose 
NCUA says there are only three eligibility requirements for FCU board membership. What are those three requirements
The three eligibility requirements for FCU board membership are the individual must be a member of the FCU. The individual cannot have been convicted of a crime involved in dishonesty or breach of trust, and the bylaws allow the board to set a minimum age requirement. 
The Federal Credit Union Act contains an extensive list of the FCU’s board of directors responsibilities list seven of these responsibilities 
Maintain general direction and control
Meet at least monthly and maintain minutes
Establish operating policies and procedures
Elect board officers, and fix compensation, if any of one specified officer
If bylaws provide for it, point credit committee or loan officers
Appoint supervisory committee
Appoint membership officer, executive committee, and other committees
Hire employees fix their duties and compensation, and set personnel, policies
Maintain confidential relationship with members
Act on membership applications
Determine classes of accounts and fix maximum individual share limit
Set loan policies regarding loan, maximum interest rates, maturities and collateral
Establish late charges and collection, policies, and procedures
Designate depository for funds
Authorize investments in borrowings
Declare dividends and interest refund
Determine surety bond needs at least annually
Authorize necessary insurance
Provide necessary service facilities
Act on loans to directors and credit to supervisory committee members in excess of 20,000
Appoint a security officer and supervise the security program
Establish records preservation program
Request approval of charter and non-standard by law amendments
Plan and hold an annual meeting report to members and maintain minutes 
What is the one mandatory ongoing committee that a federal credit union must maintain
Every federal credit union must have a Supervisory committee
The federal credit union bylaws stipulate that specific groups must have access to the credit unions, books and records. What are two of the groups named in the bylaws 
Members of the board of directors, the supervisory committee, the credit committee, the nominating committee, and the executive committee 
Can a credit unions, CEO or manager serve on the board of directors
Yes, the standard by law amendments and the 1999 revision to the standard bylaws allow the credit union manager to serve on the Board of Directors 
According to the Federal Credit Union Act what must a federal credit union do to expel a member 
In order to expel a member, the federal credit union act states a member may be expelled by 2/3 vote of the members of the federal credit union present at a special meeting called for that purpose but only after opportunity has been given to the member to be heard
How often does the NCUA records preservation program require federally insured credit unions to store their records?
Records must be stored every three months 
Which of the following are requirements of NCUA’s investment regulation, section 703
A. The federal credit unions have written investment policies, which specifying control investment activities. The credit union will undertake.
B. That those responsible for the investment function have sufficient knowledge to understand the risks involved.
C. That investment risk are reported in a level of detail appropriate for the level of risk assumed
D. All of the above.
NCUA requires: D. All of the above.
NCUA requires the Board of Directors of federally chartered credit unions to commit their investment policy to writing and review that policy annually. The policy must contain 10 items of information list four risk factors that the board policy must address. 
The written policy must include provisions, addressing how the FCU will manage the interest rate risk, how the FCU will manage liquidity risk, how the FCU will manage credit risk, including specifically , listings institutions, issuers, and counter parties that may be used or criteria for their selection, and limits on the amounts that may be invested in each and how the FCU will manage consecration risk, which can result from dealing with a single or related issuers lack of geographic distribution, holding obligations with similar characteristics, like maturities and indexes, holding bonds, having the same trustee and holding securities loans having the same originator packager or grantor
Which people associated with the federal credit union are prohibited from reaping any personal gain from investments activities of the credit union
Directors investment committee members senior employees such as the chief executive officer, CEO and chief financial officer, CFO, the investment officer, and any family members of any of these people 
What does NCUA expect a credit union to analyze about the broker dealers in safe keepers it relies upon
Credit unions are required in section 703 to analyze an update annually the background enforcement, history, financial condition, and other relevant information of any broker-dealers and safe-keeper they rely upon in their investment program
List as many permissible investments that you can recall for federal credit unions, and think of two that are prohibited 
A federal credit unions authorized to invest:
• in loans exclusively to members
• in accordance with NCUA rules and regulations in loans to other credit unions in the total amount not exceeding 25% of its unimpaired capital and surplus defined by NCUA as surplus undivided earnings
•
Federal credit unions are prohibited from investing in the stocks and bonds of businesses, such as publicly, traded corporations, General Motors, AT&T, Disney, etc. 
