e-Weekly
April 1, 2009
League Updates on Corporate Stabilization
The National Credit Union Administration (NCUA) has proposed legislation to restore the National Credit Union Share Insurance Fund (NCUSIF) to its statutory levels. The first of three steps that the legislation proposes is the establishment of a Corporate Stabilization Fund that is separate from the NCUISF. This fund would have borrowing authority up to $6 billion from the Treasury. The borrowings would then be repaid through annual assessments on credit unions that would be set by the NCUA each year. The total period of repayment would be seven years.
This legislative proposal may be incorporated into the Senate Housing Bill which contains a number of proposals related to the current economic crisis including a measure that will increase the borrowing authority of the FDIC to $100 billion as well as extending the period over which the FDIC can restore its reserves to the levels mandated by statute. The legislation also includes provisions that would give both the FDIC and the NCUA additional emergency borrowing authority. It will be difficult to predict the timing of its passage, however. Since Congress will go on a two week recess after this week it is unlikely that the proposed changes that NCUA is seeking will be passed before the beginning of May.
It is vitally important that credit unions consult with their outside auditors as they review the accounting requirements for recognizing both the impairment and the premium. It is most likely that the impairment of the one percent deposit will have to be written off in the first quarter, but there may be greater latitude with recognizing the thirty basis point premium payment.
The League will continue to work to keep member credit unions informed as new information becomes available.
Town Hall Meeting with NCUA Added to Great New England Credit Union Show Schedule!
Anthony LaCreta, acting regional director for National Credit Union Administration (NCUA) Region I will be the featured guest at a credit union town hall meeting on the NCUA’s Corporate Stabilization Program. The meeting will be held in conjunction with the Great New England Credit Union Show at the Holiday Inn in Boxborough, MA. The town hall meeting will be moderated by League President Dan Egan.
The Great New England Credit Union Show features a tremendous trade show with more than 80 exhibitors, 16 different top notch educational sessions, continuous networking as well as lunch and refreshments throughout the day.
The Great New England Credit Union show is being hosted by the Massachusetts Credit Union League, the New Hampshire Credit Union League and the Credit Union Association of Rhode Island in partnership with The Warren Group. The registration fee for the entire day is only $25, which will be waived for credit unions that register as the guest of an exhibitor. Please click here to learn more about the show or to register. (Set with:)
Fair Labor Standards Act
This is the third article in a series of e-Weekly articles on the Fair Labor Standards Act (FLSA), and it will focus on the core of the FLSA: non-exempt versus exempt employees. There often is confusion regarding these two terms, but one good way to understand the terms is as follows. The FLSA was designed to protect workers with overtime regulations, child labor laws, minimum wage, meal breaks, etc. So an employee is protected by the FLSA unless that employee is exempted from the law. If you are exempted -- or not protected -- you become an “exempt” employee. If you are protected (or not exempted), you are a non-exempt employee.
To begin to qualify for exempt status there is a threshold salary test, and that salary must be paid on a weekly period. Currently, the threshold has been raised to $455 per week. But clearly that threshold is too low to be more than a first step in determination of exempt versus non-exempt status. By the way, that threshold remains $455 even for part-time employees; there is no prorating of salary to determine exempt status.
Exempt status is also based on specific job functions that pass a duties test for exemptions, and those exemptions include classifications in one of the following categories: executive employees, administrative employees, professional employees, computer employees, or outside sales employees. Therefore, exempt status is not based on job titles, but on job duties that can pass the duties test. For example, a loan officer might be either exempt or non-exempt depending on the responsibilities of the position.
So in order to be exempt, an employee must be paid on a salary basis (no docking for a partial day), earn more than $455 per week (bare minimum), and pass very specific duties test. In our next article, we will tackle the duties tests.
Many credit unions do not require exempt employees to record their time worked. If it is later determined that an employee was misclassified and is in fact non-exempt, there could be serious ramifications if there are no actual records of the employee's time worked. For that reason and a number of other good business practices, it is recommended that exempt employees maintain time sheets that simply record sick days, holidays, vacation time, jury duty, bereavement, and other absences. However, exempt employees may not be docked pay because of a variation in the quantity of work performed and recorded. The exception to this would be intermittent time off under FMLA.
If you have any specific questions, contact Beverly Purtell, vice president of human resource management at bpurtell@cucenter.org.
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