- Director Position Description
- Supervisory Committee
- Strategic and Business Planning Committee
- Asset/Liability Committee (ALCO)
Director Position Description
Primary Duties and Responsibilities
A Director of the Credit Union will be a prudent and diligent individual who, with eight other individuals, maintains the general direction and control of the Credit Union. This includes, but is not limited to, guiding the organization to fulfill its vision/purpose/mission; setting all policies which guide the affairs of the Credit Union; and ensuring that those policies are properly implemented in accordance with the Credit Union charter, bylaws, all applicable federal and state laws, sound business practices, and membership desires.
General Duties and Responsibilities
- Attends regular and special meetings, including the annual strategic planning retreat, of the Board of Directors.
- Determines and declares dividend rates, terms, maximum shares limits, and classes of shares.
- Determines the rates, maturities, security, terms, conditions, and interest refunds for all loans granted by the Credit Union.
- Determines policies relating to the appropriate collection of delinquent loans and authorizes the charge-off of the uncollectible loans.
- Authorizes all appropriate borrowing on behalf of the Credit Union.
- Authorizes the appropriate deposit and investment of funds.
- Amends the Credit Union bylaws, subject to the National Credit Union Administration, as appropriate.
- Reviews and approves the monthly operating expenses.
- Approves the annual Credit Union operating budget.
- Hires, fixes duties, compensation and benefits, and evaluates performance of the President/CEO.
- Appoints an Executive Committee, of not fewer than three directors, to act with respect to specifically delegated functions and subject to such limitations as prescribed by the Board.
- Appoints the Credit Union's Supervisory Committee which is responsible for making, or causing to be made, all appropriate audits and checks and ensures it is properly functioning within the principles of safety and soundness.
- Appoints the Credit Union's Credit Committee which is responsible for appointing loan officers and acting on all loans and extensions.
- Serves on, and/or chairs, other ad hoc committees as appointed by the Board Chair.
- Appoints a Membership Officer, a Security Officer and a Compliance Officer as necessary.
- Determines the surety bond needs of the Credit Union at least annually and ensures appropriate persons are bonded in accordance with applicable laws and regulations.
- Evaluates and determines security needs and establishes a records retention program.
- Maintains all business affairs and affairs of its members in a confidential, ethical manner and refrains from any relationship which would create conflict of interest with regard to the Credit Union.
- Acts on loans to Directors, Credit and Supervisory Committee members, and Credit Union senior management.
- Acts as a positive ambassador for the Credit Union and its services.
- Holds or causes to be held an Annual Meeting of the membership and presents a report of the Board of Directors activities.
- Evaluates and determines the services to be offered to the membership.
Basic Qualification Requirements
- Is a member in good standing of the Credit Union.
- Individual shall have, at a minimum, a Bachelors degree.
- Has the ability and desire to attend all regular and special meetings, including the annual strategic planning retreat, of the Board of Directors and at least one educational program per year.
- Has a desire to learn about the Credit Union, its services, laws, and regulations that govern it and the responsibilities of a Board member.
- Has an open mind, the ability to use sound judgment, a willingness to accept responsibility, and the ability to make group decisions with fellow Board members.
- Acts in the overall best interest of the membership as best as can be determined.
Overview of Duties and Responsibilities
The Supervisory Committee, required by the Federal Credit Union Act, is the watchdog of the Credit Union. It is responsible for making sure that members' funds and interests are protected, as well as the interests of the Credit Union officials. The Committee is appointed by the Board of Directors from among the members of the Credit Union. It conducts an annual audit and has a continuing responsibility to ensure that the Credit Union's financial records and operations are in order.
Strategic and Business Planning Committee
- Develop and recommend to the Board of Directors the annual Business Plan and operating budget for the Credit Union.
- Organize and carry-out the strategic planning activities of the Credit Union.
- Monitor, review, and evaluate the ongoing financial performance of the Credit Union in comparison to the Business Plan and operating budget.
- Monitor, review, and evaluate the short and long term strategic goals adopted by the Board of Directors.
- Responsible for enabling the process of defining the Credit Union's major strategies and goals for the future. This includes setting the direction of the Credit Union and defining its vision, purpose, mission, and values. This also includes the ongoing review and assessment of achieving the major goals of the organization. Some of the organizations goals may incorporate growth or market penetration objectives, financial performance targets, and service goals.
- Develop and recommend to the Board of Directors the annual Business Plan of the Credit Union. The Business Plan should incorporate forecasts and assumptions consistent with the Credit Union's short and long term goals and strategies. These factors should be combined into a comprehensive and cohesive budget.
- Evaluate and review the Credit Union's business and financial plans throughout the year, monitoring actual versus planned results.
Duties of the Committee:
The items cited below do not necessarily represent an all inclusive list of Committee duties, given the dynamic nature of its responsibilities.
- Define and review, on a regular basis, the core objectives fundamental to the successful ongoing operation of the Credit Union.
- Identify major issues, actions, or services essential to fulfill the core objectives.
- Evaluate and review recommendations from Credit Union management regarding financial assumptions and cost projections that are anticipated for inclusion in the Business Plan and operating budget.
- Submit a final recommended Business Plan and operating budget to the Board of Directors at their regular December meeting.
- Plan and facilitate the annual and semi-annual strategic planning sessions of the Board of Directors.
Asset/Liability Committee (ALCO)
- Develop and Asset/Liability Management (ALM) process together with related policies and procedures.
- Establish an ALM monitoring and reporting system.
- Develop asset/liability strategies and tactics.
- Monitor, review, evaluate, and recommend rates for Credit Union loan products to the Board of Directors.
- Monitor, review, and evaluate investment portfolio activity.
- Submit a written report and/or meeting minutes to the Board at least quarterly.
Identify, manage, and control the amount of risk the Credit Union assumes as part of normal operations, while ensuring adequate earnings and net worth. The four main risk categories are listed below.
- Interest Rate Risk (ICR) - risk that changes in prevailing interest rates will adversely affect the earnings stream of the Credit Union. This includes interest income and dividend expense effects.
- Price Risk (also called Valuation or Market Risk) - risk that changes in prevailing interest rates will adversely affect assets, liabilities, and capital, at different times or in different amounts. Price Risk is the balance sheet effect due to changes in interest rates and other market factors both internal and external to the Credit Union.
- Liquidity Risk - risk that not enough cash will be generated from either assets or liabilities to respond to the needs of our membership and to access unanticipated earnings enhancement opportunities.
- Credit Risk - risk that some loans and investments may not be repaid (default risk); implications of asset mix or risk-based capital and asset quality on ability to leverage the Credit Union's net worth.
Provide for growth that is sound, profitable and balanced without sacrificing the quality of service.
Finally, manage and maintain ALM policies and procedures that are consistent with the short and long term strategic goals of the Board of Directors.
Duties of the Committee:
The items cited below do not necessarily represent an all inclusive list of ALCO's duties, given the dynamic nature of its responsibilities. On a regular basis, ALCO should:
- Hold a formal meeting (usually once a quarter). Informal meetings will be held on an as needed basis.
- Monitor and discuss the status and results of implemented asset/liability management strategies and tactics.
- Review current and prospective liquidity positions and monitor alternative funding sources.
- Review measurement reports on various risks that can be measured with a reasonable degree of effort. Compare simulated exposures of these risks to policy limits. Discuss and report on the impact of major funding shifts and changes in overall investment and lending strategies.
- Review current and prospective net worth levels to determine sufficiency in relation to expected growth, interest rate risk, price risk, and asset mix/quality.
- Review outlook for interest rates and economy at both local and national levels.
Develop alternate deposit, loan, and investment strategies which take into account changes in:
- Interest rate levels and trends.
- Deposit and loan products and related markets.
- Credit Union regulations.
- Monetary and fiscal policy.
- Develop and recommend pricing and maturity distributions of deposits, loans and investments to the Board of Directors.
- Maintain minutes of all meetings and submit them to the Board of Directors for approval.
Also, ALCO will ensure that it is aware of the overall financial performance of the Credit Union and, therefore, will keep abreast of significant changes/trends in its financial results. This includes, but is not limited to:
- Review of actual net interest income and asset/liability distribution versus budget.
- Measure of performance against established standards and, if appropriate, against peer group data.
- Review of the Credit Union's Dividend Policy to its members.
- Review of the level and makeup of non-earning assets.