CUNA Comment Letter
NCUA proposal to allow FCUs to reimburse a guest traveling with a CU official on credit union business.
September 21, 2001
Ms. Becky Baker
Secretary to the Board
National Credit Union Administration
1775 Duke Street
Alexandria, VA 22314-3428
Dear Ms. Baker:
The Credit Union National Association supports the National Credit Union Administration Boards proposal to permit federal credit unions to have more flexibility in determining who may be reimbursed by the credit union for travel expenses. CUNA represents more than 90% of our nations over 10,600 state and federal credit unions.
Under the Federal Credit Union Act and NCUAs rules, only one board officer of a federal credit union may be compensated as such (12 USC 1761(c), 12 CFR 701.33). The agencys proposal would not affect that limitation. Rather, the proposal is narrowly focused and addresses only the issue of whose direct costs may be paid or reimbursed by a federal credit union for travel in connection with official credit union business.
The agencys regulations exclude from the definition of compensation-- the payment or reimbursement for travel expenses incurred by credit union officials when that travel is necessary or appropriate to carry out official credit union business and is consistent with written credit union board policy. Since 1992, the agencys rules have permitted a federal credit union to pay or reimburse one immediate family member of each credit union official traveling on credit union business. In order to cover such costs, the federal credit union must have written policies covering the payment or reimbursement of such expenses; only travel that is necessary or appropriate for credit union business may be included.
Now the agency is proposing to amend its rules to allow an individual traveling with a credit union official on appropriate business to be reimbursed even if he or she is not an immediate family member. CUNA supports this proposal for several reasons.
The proposal is fully consistent with the regulatory approach initiated under Chairman Dennis Dollars administration and reflected in other proposed and final rules, such as Reg-Flex and incidental powers, which is to minimize government intrusion where appropriate. The proposal recognizes that, absent congressional directives, government agencies do not need to be the in business of assessing individual relationships to determine whether they meet a regulatory standard. The proposal supports credit union volunteers by facilitating their ability to participate in official credit union travel, since their travel companions would no longer be limited to immediate family members. Further, the proposal would afford a federal credit union more latitude in deciding for itself, rather than having the agency determine, who may be reimbursed for travel expenses.
While providing incremental flexibility to a federal credit union, the agency would still require that the travel cost reimbursements be consistent with credit union board policies. The Supplementary Information accompanying the proposal notes that the policy must ensure that only travel that is reasonable in relation to the federal credit unions resources and financial condition-- will be permitted for reimbursement. This is useful guidance, and we request the agency include it in the Supplementary Information that accompanies the final rule.
The agency seeks specific comment on whether the proposal is understandable and minimally intrusive. We agree that it is. An important aspect of the agencys approach is that no federal credit union is required to adopt the new travel reimbursement policy and all federal credit unions would still be free to maintain a more restrictive policy for reimbursements for individuals traveling with credit union officials. This would include prohibiting such reimbursements, if a credit unions board feels such a policy is in the best interests of the credit union and its members.
The proposal points out that the agency has determined under the Assessment of Federal Regulations and Policies on Families (Treasury and General Government Appropriations Act, PL 105-277) that family well being will not be affected by the amendment. We agree with this assessment as we fully expect credit union boards, which choose to follow the amendment, will implement their new flexibility with reasonableness and common sense, consistent with their fiduciary responsibilities.
Thank you for the opportunity to comment on this proposal. Please feel free to contact me at 202-218-7769 or firstname.lastname@example.org if you have any questions about our letter or the positions it reflects.
Mary Mitchell Dunn
CUNA Associate General Counsel
|Cc:||NCUA Board Chairman Dennis Dollar
NCUA Board Member Yolanda Wheat
NCUA Board Member Geoff Bacino
CUNA Governmental Affairs Committee