Removing Barriers Blog

Director Compensation, Audit Committee Authorized in Colorado
Posted April 18, 2016 by CUNA Advocacy

After months of lobbying policymakers, the Mountain West Credit Union Association was successful in enacting legislation, S 125, that modernizes the Colorado Credit Union Act to reflect the current financial services environment and reduce governance redundancy. The bill permits state chartered credit unions to compensate directors and to substitute an audit committee for a supervisory committee

With the enaction, Colorado becomes the 14th state to permit directors to be compensated. Previously, only the Treasurer could be paid. The measure requires compensation be “reasonable” and be determined by state regulators. According to the League, compensating directors should be an option because board members face greater responsibilities under the current regulatory environment.

The bill also authorizes the board to replace a supervisory committee with an audit committee. Supervisory committees are unique to credit unions and have voluntary members that are separate from credit union boards. The key role of supervisory committees is to perform the audit function of credit unions. Because boards have the fiduciary duty to credit unions, many appoint audit committees of the board to perform the audit function as well. This change would reduce the redundancy having two committees perform the same function.

Both of these powers are completely voluntary and their adoption is subject to the credit union board and ultimately credit unions’ membership.