Oldie But a Goodie – Which Hats Cannot Be Worn Together
Written by Elizabeth M. Young LaBerge, Senior Regulatory Compliance Counsel, NAFCU
Credit union volunteers and staff sometimes wear a lot of hats at once. A question the NAFCU Compliance Team gets frequently is whether someone in a particular role is disqualified from serving in another role concurrently. Internal controls are a supervisory focus for NCUA this year, so we thought it might be a good time to remind credit unions about a helpful tool located in Appendix 4A of the NCUA Examiner Guide.
Conflicting Management Positions
The below chart is attached to the NCUA Examiner Guide's chapter on internal controls. It sets out a list of seventeen staff and volunteer positions at a credit union, and then lists other positions that cannot be held concurrently with that position, either because it's prohibited by law, regulation, or bylaw.
It then ALSO indicates what other positions aren't explicitly prohibited by law, but shouldn't be held by someone in that position by virtue of sound internal controls. For your referential enjoyment, NCUA's Conflicting Positions table:
|
Position |
Prohibited by Law, Regulation, or Bylaw |
Prohibited by Principles of Sound Internal Control |
|
Chief Executive Officer (CEO) |
Vice President Secretary Assistant Secretary Treasurer Assistant Treasurer Manager Assistant Manager Membership Officer (if the President countersigns checks) |
Member of the Supervisory Committee Supervisory Committee Assistant Credit Union Employee |
|
Assistant Executive Officer |
President Secretary Assistant Secretary Treasurer Assistant Treasurer Manager Assistant Manager Membership Officer (if the Vice-President countersigns checks) |
Member of the Supervisory Committee Supervisory Committee Assistant Credit Union Employee |
|
Recording Officer (Secretary) |
President Vice President Manager Assistant Manager |
Member of the Supervisory Committee Supervisory Committee Assistant Credit Union Employee |
|
Assistant Secretary |
President Vice President Treasurer |
|
|
Financial Officer (Treasurer) |
President Vice President Member of the Supervisory Committee Supervisory Committee Assistant Membership Officer Assistant Secretary |
Member of the Credit Committee |
|
Assistant Treasurer |
President Vice President Membership Officer |
Member of the Supervisory Committee Supervisory Committee Assistant |
|
Director |
Manager Assistant Manager (Only one director may also be a member of the Supervisory Committee) |
Credit Union Employee |
|
Executive Committee Member |
Any officer or employee other than a director (Only directors may serve as Executive Committee Members) |
Member of the Supervisory Committee Member of the Credit Committee Credit Union Employee Membership Officer |
|
Supervisory Committee Member |
Member of the Credit Committee Credit Union Employee Treasurer (Only one board member may also serve on this committee.) |
Loan Officer Membership Officer Assistant Treasurer President Vice President Secretary |
|
Credit Committee Member |
Member of the Supervisory Committee Supervisory Committee Assistant (Only one credit committee member may be appointed a loan officer.) |
Treasurer Manager |
|
Loan Officer |
Membership Officer (Only one Credit Committee member may be appointed a loan officer.) |
Member of the Supervisory Committee Supervisory Committee Assistant |
|
Membership Officer |
Treasurer Assistant Treasurer Loan Officer Manager Assistant Manager President or Vice-President if checks are countersigned |
Member of the Supervisory Committee Supervisory Committee Assistant |
|
Manager |
Member of the Board of Directors except by bylaw provision President Vice President Member of the Supervisory Committee Supervisory Committee Assistant Membership Officer |
Relative of any official Member of the Credit Committee |
|
Assistant Manager |
Member of the Board of Directors Member of the Supervisory Committee Membership Officer |
Relative of any official |
|
Supervisory Committee Assistant |
Treasurer Assistant Treasurer Manager Assistant Manager Member of the Credit Committee Credit union Employee |
Loan Officer Membership Officer Relative of any official or Employee Assistant Treasurer President Vice-President Secretary |
|
Credit Union Employee |
Member of the Supervisory Committee Supervisory Committee Assistant |
Relative of any official Member of the board of directors |
Elizabeth M. Young LaBerge,