FCU succession planning proposal out for comment until April 4

A proposed rule to require federal credit union (FCU) boards of directors to establish and adhere to processes for succession planning is out for comment until April 4, according to a notice Thursday in the Federal Register.

The National Credit Union Administration (NCUA) said the aim of the proposal is to ensure that FCU boards set succession plans to help ensure their institutions have plans to fill key positions – such as officers of the board, management officials, executive committee members, supervisory committee members, and (where provided for in the bylaws) the members of the credit committee – to provide continuity of operations. The proposal would also require directors to be knowledgeable about the FCU’s succession plan.

The proposal would apply only to FCUs, but the agency said the board’s aim is to “encourage and strengthen succession planning for all credit unions.” It said the proposal would leave FCUs “broad discretion” in implementing the proposed requirements in an effort to minimize the associated regulatory burden.

The proposed rule was issued on a vote Jan. 27 of the NCUA Board on a vote of 2-1, with Board Member Rodney Hood dissenting.

Reg lookup: Succession Planning