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board member compensationAs more states decide to let credit unions compensate their board members, we’ve been keeping our readers up to date about the progress. One of our posts on a credit union group in LinkedIn got a lot of feedback, and we’d like to share some of the comments with you. What’s your take on the issue? We’d love to hear from you.

"I am cautious about this, and want to see some feedback and experience with it. I'm not sure how to do this, but I am concerned about boards having the unilateral ability to just set their own compensation. There should be some semi-independent control or review that justifies the amount of such compensation and the value of that board member's contribution to the credit union. Perhaps there should be some limits on the compensation. Although it is most commonly the Treasurer, Federal Charters can choose to compensate one board member today for whatever duties that board member performs."
—Daniel, a credit union treasurer/CEO from Washington DC

"As long as the amount paid is not based on the success of the credit union I'd be OK with it. This might be a good way to get more people interested in serving on a board."
—Scott, a credit union vice president of technology from Arizona

"What will the credit union movement become if boards of directors are compensated for sitting on the board? … Who is going to set their compensation if it is authorized? Certainly they have already become more like banks, etc., just by virtue of products they offer but that is a different issue. I have no problem with that. The credit union movement historically was a volunteer movement to serve one another. That is one of the things that still makes them stand out from the banks. Not to say that the great interest rates and return on savings that are usually offered by credit unions are way better than the banks. What would NCUA say about it? Just lots of questions raised here in my mind and I'm still having a hard time coming to terms with this idea being a good thing!"
—Lorilee, a phone banker from South Dakota 

"My background is with Savings and Loans, Commercial Banks, Investment Companies and Credit Unions. While each have there pluses and minus. The credit unions are on the cusp of greatness and as such the Board of Directors should have a greater hand in guiding the credit union and management. The board is often times just a rubber stamp for the actions of the management. Therefore, if they are paid, they should have a greater responsibility for the success or failure of the institution."
—Larry, an independent financial services professional from Alabama 

"I am a former State regulator where it was/is permitted (actually the law is silent on this issue, therefore it is permitted). As a practice, few credit unions follow this practice. I think this is primarily due to the voluntary nature of credit union officials. Arguably, you might get a higher quality of board members serving with compensation. I would like this as an option; the board member could always contribute this compensation to a financial literacy charity or some other charity promoting the credit union movement… For banks and other financial institutions there are various salary surveys that can help establish a range of compensation, typically segmented by the asset size of the institution. This can help provide a basis the compensation being comparable and reasonable in amount. Typically, in my experience the vast majority of bank directors (except those at the largest banks) are under-compensated for the amount of work performed and the liability for serving as a bank director. 

This does raise another interesting issue: if credit union directors are compensated and are no longer strictly volunteers, will this have any impact on their liability for their actions as directors? Arguably, if they are being compensated, they should have greater potentially liability than someone whom is strictly a volunteer."
—George, a financial services consultant from Georgia

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