regulatory and compliance issues and considerations

Legal / Compliance Consultation Note: There may be circumstances where
remuneration may be allowed, but the interpretation and assessment of the issue needs
to be addressed with your legal/compliance advisor as there are many factual issues
that may vary the interpretation of this NCUA “Opinion Letter” together with practical
application issues that may cause you to risk assess the limited statement in a
somewhat different light.” We acknowledge that many Credit Unions have extended
certain such courtesies to former board members time out of mind; and that the matter –
if not abusive – is low risk. Nonetheless, the Credit Union needs to consider the letter
above; and insure it makes a fully informed decision with regard to any actions it may
take that could be called into question pursuant to the Letter in question or otherwise.
Question on Reimbursement of Expenses by Credit Union: Particular Question
Omitted Per Rules of Prof. Responsibility.
Response (Revised for general consideration): These are complicated issues; and
complicated times (where such costs/expenses are more likely to face scrutiny. Thus, it
is a good time to revisit this topic to insure your house is in order. It is difficult to assess
without individual assessment of particular facts. Generally, such questions are
determined via consideration of the following factors:
1. For Volunteers: (1) Is it permissible per the Credit Union’s written policy and is
also a bona fide business related expense; and (2) Are expenses for an
“immediate family member” permissible?
2. For Employees: (1) Is it permissible per the Credit Union’s written policy and is
also a bona fide business related expense; and (2) Are expenses for an
“immediate family member” taxable?
In assessing this look to:
1. Our Sample Policy in CUPP IX / Section T / Item O – see particularly pages
5-9. (Updated 9/14/2009)
2. Consider the following chart and assessment of NCUA Letters on these
issues of reimbursement of expenses.
3. Consider “common sense” issues – such as the “de minimis” rules
associated with “less costly items such as meals per the IRS Publication
15-B (2009) which is discussed in the CUPP Item noted.
In light of the many variables I provide no further response other than the general
matters addressed herein; and in the sample policy noted above. If you have
particular questions, please pose them to a qualified legal and/or tax adviser as
applicable.
TABLE – Are expenses of a Volunteer, Employee and/or their Immediate Family
Members Reimbursable. Based on the following considerations – each (Volunteer
vs. Employee) is a separate matter that has to be assessed independently:
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Revised February 2010
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