3 Colo. Code Regs. § 703-3-9.2

Current through Register Vol. 47, No. 22, November 25, 2024

Section 3 CCR 703-3-9.2 - Compensation of Directors and Committee Members

Members of the credit committee, supervisory committee, and audit committee shall receive no compensation for the performance of duties for the credit union in such capacities. However, such persons may be reimbursed for reasonable and actual out-of-pocket expenses incurred by them in the normal performance of their duties. Such persons may also be reimbursed for actual wages or salary lost by virtue of the performance of duties for the credit union only if authorized by a majority of the members voting at an annual meeting or meeting specifically called for that purpose.

Subject to the provisions of this section, a credit union may pay compensation to the board of directors for their services to the credit union that is reasonable in accordance with subsection (c) of this section:

(a) "Compensation" includes anything of value that is both given in exchange for services performed and required to be reported to the IRS as income. "Compensation" does not include: reasonable health, accident or similar insurance protection, and the reimbursement of reasonable expenses incurred in the execution of duties of the position.

(b) A credit union shall implement and maintain appropriate internal controls to ensure that compensation is reasonable and that such compensation does not negatively impact the financial condition of the credit union and the credit union is adequately capitalized. Such internal controls shall include, without limitation the following:

(1) Prior to initial determination to pay compensation to directors or to increase any such payments, the board of directors shall in good faith create and review all written policies related to compensation and shall review the amount of compensation provided to the directors. The written policy must discuss the precise terms and conditions for a Director to receive or earn compensation, the expected timing of the payments, the applicable IRS reporting requirements, the amounts of the payments and/or methodology used to calculate the amounts, defined term limits to receive compensation for service and a requirement for an annual review and re-validation of the continued reasonableness of the amounts paid.

(2) Review set forth in subsection (1) must also:

(A) Contain written determination that the compensation to be paid to directors is reasonable, including a discussion of the factors considered in making such determination; and

(B) Be included in part of the minutes of the meeting at which matters relating to compensation were deliberated and voted upon by the board.

(c) Compensation is reasonable if it meets all of the following criteria:

(1) It is proportional to the services provided by the director;

(2) It is reasonable considering the financial condition of the credit union; and

(3) It is comparable to compensation paid by comparable organizations of a similar size and operational complexity.

(d) A credit union shall provide written notice to the Commissioner of Financial Services of its intent to adopt a policy and subsequent changes to compensate directors at least sixty days before adopting such policy. The notice must include:

(1) All documentation described in subsection (b) of this Section.

(2) Any information as may be required by the Commissioner;

(3) Any objections or concerns regarding the proposed plan raised by the Commissioner must be satisfactorily resolved prior to the actual implementation.

(e) The Commissioner may, at any time, order the compensation be reduced or eliminated, if it is deemed to cause an unsafe or unsound condition to the credit union. C.R.S. 11-30-109(3)

3 CCR 703-3-9.2

39 CR 15, August 10, 2016, effective 9/1/2016