NASCUS Clarifies Fiduciary Duty and Board Requirements for State Chartered Credit Unions

Jan. 10, 2011 — Recently, the National Credit Union Administration (NCUA) made final a rule that creates a new regulation addressing fiduciary duty and board education for federal credit unions. State chartered credit unions should continue to follow their state regulation and law in these areas.

The final rule sets a national standard for fiduciary duty for federal credit unions and also requires certain financial literacy benchmarks be met by Board members including the ability to read and understand a balance sheet. Some states have their own standards in this area, but state charters are not required to follow NCUA's new regulation.

Some trade press coverage of this issue categorized the Final Rule Part 701 as applying to all federally insured credit unions. State law dictates fiduciary duty and board member responsibilities for state-chartered credit unions. If you have questions, contact Brian Knight at brian@nascus.org.