Governing Body, Officers, and Committees

V.S.A. tit. 8, ch. 221, subch. 3

in effect

8 V.S.A. § 31301 Number and election of directors

31301. Number and election of directors (a) The governing body of a credit union shall consist of an odd number of directors, at least five in number. The initial governing body shall be elected at the organizational meeting of the credit union as provided in subsection 31103(e) of this title, and thereafter by the members of the credit union at the annual meeting. (b) Each director shall hold office for the term provided in the bylaws as long as the director is qualified to serve and until the director’s successor has qualified. The term of a director may not exceed three years. A director may serve more than one term. If directors are elected for terms in excess of one year, their terms of office shall be staggered so that, insofar as possible, an equal number expires each year. Added 2005, No. 16, § 1, eff. July 1, 2005.

8 V.S.A. § 31302 Duties of governing body

31302. Duties of governing body The governing body shall have authority for the general management of the credit union and, among other things, the governing body shall: (1) have the authority and responsibility for directing the operations, funds, and records of the credit union; (2) act upon applications for membership or appoint an executive committee, a membership committee, or one or more membership officers from among the members of the credit union, other than the treasurer, an assistant treasurer, the chief executive officer, an assistant chief executive officer, or a loan officer, who may be authorized by the governing body to approve applications for membership under such conditions as the governing body may prescribe; except that the membership committee or membership officers so authorized shall submit to the governing body or to the executive committee, if applicable, at each monthly meeting a list of approved or pending applications for membership received since the previous monthly meeting, together with such other related information as the bylaws or the governing body may require; (3) provide a blanket fidelity bond covering the directors, officers, employees, members of official committees, attorneys at law, and other agents as required by subsection 31602(a) of this title; (4) fill vacancies on the governing body until successors elected at the next annual meeting have qualified; (5) establish personnel policies, including policies for the compensation of employees; (6) authorize the employment and compensation of the chief executive officer and the treasurer; (7) authorize the employment of such person or persons as may be necessary to carry on the business of the credit union or delegate such authorization to the chief executive officer who shall hire such other persons necessary to carry on the business of the credit union, or contract with persons or organizations as may be necessary to carry on the operations of the credit union; (8) determine the number of shares and the amount of deposits that may be owned by a member, the limitations to apply alike to all members; (9) approve an annual operating budget for the credit union; (10) authorize the conveyance of property; (11) have the power to borrow or lend money to carry on the functions of the credit union; (12) have the power to appoint any special committees deemed necessary; (13) determine, from time to time, the interest rates not in excess of that allowed by law that shall be charged on loans to members and authorize interest refunds, if any, to members in proportion to the interest paid by them on loans or, at the discretion of the governing body, delegate to the executive committee or the chief executive officer the authority to establish interest rates pursuant to policies and guidelines adopted by the governing body; (14) establish lending policies and, within any limitations set forth in the credit union’s bylaws, fix a maximum amount that may be lent with and without security to a member; (15) have the authority to review a loan application denied by a loan officer or denied by the credit committee, as applicable; (16) declare dividends on share accounts at a credit union and determine the interest rate that will be paid on deposits at a community development credit union or, at the discretion of the governing body, delegate to the executive committee or the chief executive officer the authority to establish dividend rates and interest rates that will be paid on share accounts and on deposits pursuant to policies and guidelines adopted by the governing body; (17) establish investment policies and invest credit union funds, except that the governing body may designate an investment committee or any qualified individual or entity responsible for making investments under policies established by the governing body; (18) review and approve or reject loans to other credit unions that are not members if surplus funds warrant it and review and approve or reject loans to members of the supervisory and credit committees; (19) suspend or remove any or all officers, or any or all members of the credit, supervisory, membership, or other committees from their positions on the committees for failure to perform their duties; (20) establish and maintain a system of internal controls consistent with applicable law; (21) review and ratify all written policies of the credit union at least annually; (22) perform such other duties as the members from time to time direct and perform or authorize any action not inconsistent with this part and not specifically reserved by the bylaws to the members; and (23) establish other policies as the governing body deems reasonable or prudent, and such policies as required by law, by regulation, or by the Commissioner. Added 2005, No. 16, § 1, eff. July 1, 2005; amended 2021, No. 105 (Adj. Sess.), § 325, eff. July 1, 2022.

8 V.S.A. § 31303 Executive committee

31303. Executive committee (a) The executive committee, if one is appointed by the governing body, shall consist of an odd number of no fewer than three directors of the credit union. (b) The executive committee shall meet in accordance with section 31304 of this title and as often as necessary and shall act for the governing body between meetings of the governing body in all other matters except for approval of policies and amendments to the organizational documents or bylaws, subject to such conditions and limitations as prescribed by the governing body. (c) The executive committee shall keep complete minutes of all of its actions, copies of which shall be submitted to the governing body at its next meeting. Added 2005, No. 16, § 1, eff. July 1, 2005.

8 V.S.A. § 31304 Meetings of governing body

31304. Meetings of governing body (a) The governing body of a credit union shall meet as often as is necessary to ensure the proper oversight of the credit union but not less than four times per year, at least once each quarter. If a governing body meets less than monthly, during the months in which the governing body does not meet, the governing body shall appoint an executive committee that meets monthly. The minutes of the executive committee meetings shall be ratified by the governing body at the governing body’s next meeting. (b) Unless the bylaws provide otherwise, the governing body may permit any and all directors to participate in all except one meeting per year of the governing body through the use of any means of communication by which all directors participating in the meeting may simultaneously hear each other and communicate during the meeting. A director participating in a meeting by this means is deemed to be present at the meeting. (c) At the meeting of the governing body following the annual meeting of members, the governing body shall elect officers of the governing board as provided in section 31305 of this title. (d) Unless a greater number is required by the bylaws, a majority of the governing body shall constitute a quorum. The act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the governing body unless the act of a greater number is required by this part or the bylaws of the credit union. Added 2005, No. 16, § 1, eff. July 1, 2005; amended 2025, No. 142 (Adj. Sess.), § 39, eff. July 1, 2026.

8 V.S.A. § 31305 Officers

31305. Officers (a) At the first regularly scheduled meeting of the entire governing body at which a quorum is present following the organizational meeting and thereafter following each annual meeting, but in no event more than 30 days after such organizational meeting or annual meeting of the members, as applicable, the directors shall elect from their own number a chairperson of the governing body, and one or more vice chairpersons, a treasurer, and a secretary. Only the treasurer and the secretary may be the same individual. (b) Unless sooner removed, the terms of the officers shall be one year, or until their successors are chosen and have duly qualified. (c) The duties of the officers shall be prescribed in the bylaws. (d) The governing body shall appoint a person to act as the chief executive officer of the credit union and to be in charge of its operations. (e) A credit union may use any titles it chooses for the officials holding the positions described in this section, provided such titles are not misleading. (f) Any person elected to fill a vacancy caused by death, resignation, or removal of an officer shall be appointed by the governing body to serve for the unexpired term of such office until his or her successor is duly elected and qualified. Added 2005, No. 16, § 1, eff. July 1, 2005.

8 V.S.A. § 31306 Supervisory committee

31306. Supervisory committee (a) The supervisory committee shall consist of no fewer than three members of the credit union, none of whom shall simultaneously serve as a director, serve on the credit committee, serve as an officer of the credit union, and be otherwise regularly employed by such credit union. Supervisory committee members shall be members of the credit union in good standing. (b) Supervisory committee members shall be appointed by the directors at the first regularly scheduled meeting of the entire governing body at which a quorum is present following the annual meeting of the members. Supervisory committee members shall hold office for the term provided in the bylaws, as long as such supervisory committee member remains qualified to serve, and until the committee member’s successor has been duly appointed and qualified. The term of a supervisory committee member shall not exceed three years. A supervisory committee member may serve more than one term. If the supervisory committee members are appointed for terms in excess of one year, their terms of office shall be staggered so that, insofar as possible, an equal number expires each year. (c) The supervisory committee shall be responsible for ensuring that members of senior management and directors meet required financial reporting objectives and establish practices and procedures sufficient to safeguard members’ assets. To meet its responsibilities, the supervisory committee shall determine whether internal controls are established and effectively maintained; accounting records and financial reports are promptly prepared and accurate; relevant plans, policies, and procedures established by the governing body are properly administered; and the governing body’s plans, policies, and control procedures are sufficient to safeguard against error, carelessness, conflict of interest, self-dealing, and fraud. (d) The supervisory committee shall have the sole authority to engage or terminate outside and internal auditors. The supervisory committee may engage any assistance necessary for the performance of its duties, including having any audit, examination, or verification required by law, regulation, or bylaw. Any agreement between the supervisory committee and an outside auditor shall be documented by an engagement letter that specifies the terms, conditions, and objectives of the engagement or statement of agreed-upon procedures in accordance with this subsection and shall permit access by the Commissioner to the work papers of the auditor. (e) The supervisory committee shall make or cause to be made a comprehensive annual audit of the books and affairs of the credit union, including its assets, liabilities, capital, income, expense accounts, and the minutes of all governing body and governing-body-appointed committee meetings. Such audit shall cover the period elapsed since the last audit. The annual audit shall include an assessment of internal controls and security measures in place covering the credit union’s electronic information processing and its electronic commerce systems, if any. Any compensated outside auditors performing audits for the supervisory committee shall be independent of any management employee, any member of the governing body, any member of a governing-body-appointed committee, the credit manager, any loan officer, and any member of the immediate families of any of these. The annual audit shall meet the following minimum guidelines: (1) a credit union with total assets of $100 million or more shall have an opinion audit of the credit union’s financial statement performed by an independent licensed certified public accountant; and (2) a credit union with total assets of less than $100 million shall have: (A) an opinion audit of its financial statements performed by an independent licensed certified public accountant; or (B) an opinion audit of its balance sheet performed by an independent licensed certified public accountant; or (C) an agreed-upon procedures engagement performed by a person having adequate technical training and proficiency as an auditor commensurate with the level of sophistication and complexity of the credit union under audit, provided if such engagement is not comprehensive, the supervisory committee shall satisfy any remaining requirements of a comprehensive audit in accordance with this subsection and that, in any event, shall meet the minimum standards and guidelines established by regulation of the National Credit Union Administration (NCUA); or (D) a comprehensive audit performed by the supervisory committee or the credit union’s internal auditors or the internal auditor of another credit union, which audit shall meet the minimum standards and guidelines established by regulation of the NCUA. (f) The supervisory committee shall perform or cause to be performed a verification of members’ accounts at least once every two years through: (1) verification of share and loan accounts of all members; (2) statistical sampling of member share and loan accounts done in connection with an opinion audit of the financial statements performed by an independent licensed certified public accountant; or (3) verification of accounts and passbooks in accordance with the requirements of the National Credit Union Administration. (g) The supervisory committee shall make any additional audits and supplemental verifications and examinations of the affairs of the credit union that it deems appropriate or that the governing body or Commissioner requires. (h) Promptly following the completion of an audit or other verification or examination, the supervisory committee shall: (1) file a written report at the main office of the credit union; (2) present the report to the governing body at its next meeting; (3) provide a summary of the results of the audit to the members of the credit union, orally or in writing, at the next annual meeting, and if the audit was not performed by the supervisory committee, the outside auditor shall provide the written or oral summary thereof; and (4) file a copy of the written report and any written summary with the Commissioner. (i) The supervisory committee shall provide related working papers, policies, and procedures concerning the annual audit, internal audit, examination, and verification to the Commissioner upon the Commissioner’s request and shall require any independent licensed or certified public accountant, internal auditor, or any other auditor to provide such related working papers, policies, and procedures concerning the annual audit, internal audit, examination, and verification to the Commissioner upon the Commissioner’s request. The governing body shall require that the auditor submit to the governing body a signed report of the audit or examination showing the condition of the credit union within a reasonable period of time from the effective date of the audit or examination. (j) At any time that the supervisory committee discovers any operating practices of the credit union that it deems unsafe that have not been corrected by the governing body, the supervisory committee shall give notice to all credit union members of a special meeting of members to be held for the purpose of receiving the report of the supervisory committee of such operating practices. The membership of the credit union shall have the authority to accept or reject the report of the supervisory committee. (k) The supervisory committee shall meet as often as necessary and at least annually and shall keep complete minutes of all of its meetings, including the names of those members present. (l) If the supervisory committee or its independent auditor or other person fails to comply with requirements of this section or the terms of an engagement letter required by this section, the Commissioner may: (1) reject the audit report and provide a reasonable opportunity to correct deficiencies; (2) impose the remedies available in subsection (m) of this section, provided any of the conditions specified in that subsection are present; and (3) seek formal administrative sanctions against the supervisory committee or its independent auditor, or both. (m) The Commissioner may compel a credit union to obtain an audit that meets the minimum requirements of subdivision (e)(1) or (2)(A) of this section for any fiscal year in which any of the following three conditions are present: (1) the supervisory committee has not obtained or performed an audit; (2) the supervisory committee had obtained or performed an audit that does not meet the requirements of this section; or (3) the credit union has experienced serious and persistent recordkeeping deficiencies. (n) The Commissioner may compel a credit union to obtain an opinion audit of its financial statement performed in accordance with generally accepted auditing standards by an independent person who is licensed by the State of Vermont, even if such audit is not required by subsection (e) of this section, for any fiscal year in which the credit union has experienced serious and persistent recordkeeping deficiencies. (o) For purposes of this section, a recordkeeping deficiency is “serious” if the Commissioner reasonably believes that the governing body and the management of the credit union have not met financial reporting objectives in a timely manner and established practices and procedures sufficient to safeguard members’ assets. A serious recordkeeping deficiency is “persistent” when it continues beyond a usual, expected, or reasonable period of time. Added 2005, No. 16, § 1, eff. July 1, 2005; amended 2007, No. 178 (Adj. Sess.), § 4; 2021, No. 105 (Adj. Sess.), § 326, eff. July 1, 2022.

8 V.S.A. § 31307 Credit committee; credit manager

31307. Credit committee; credit manager (a) Except as provided in section 31313 of this title, the governing body may delegate, in accordance with its bylaws, all or part of its lending authority to a credit committee, a credit manager, one or more loan officers, or any combination thereof, who shall review and act on all applications for extensions of credit, or for release or substitution of collateral, in accordance with the loan policy prescribed by the governing body. (b) If the bylaws of a credit union provide for a credit committee, such committee shall consist of an odd number of three or more members of the credit union and may be appointed by the governing body or elected by the members, as provided in the bylaws. (c) No member of the credit committee shall simultaneously serve on the supervisory committee or on the governing body, and all such credit committee members shall be members of the credit union in good standing. (d) The credit committee, if any, shall meet as often as necessary, but at least monthly. All actions by the committee shall be by majority vote of those members present at any meeting at which a quorum is present. A majority of the credit committee shall constitute a quorum. The credit committee shall keep complete minutes of all of its meetings, including the names of those present. (e) The credit manager or loan officer shall provide to the governing body or the credit committee, if any, on at least a monthly basis, a complete listing of all applications for extensions of credit or for release or substitution of collateral that were reviewed and acted upon or, alternatively, inform the governing body that such information is available upon request. (f) A credit manager or loan officer shall not disburse the funds of the credit union for any extension of credit approved by such credit manager or loan officer. (g) An applicant for an extension of credit or release or substitution of collateral that has been disapproved by a credit manager or loan officer may appeal to the credit committee or, in the absence of a credit committee, to the governing body. In those instances where the credit committee made the initial denial of an applicant’s request for an extension of credit or release or substitution of collateral, the applicant may appeal to the governing body. Any such appeal to the credit committee or the governing body, as applicable, shall be acted upon at the next regular meeting of the credit committee or governing body. If the initial denial of the loan application has not been reviewed by the credit committee or governing body, as applicable, the notice of loan denial given to the member shall include a notice that the member has a right, upon written request, to appeal the loan denial to the credit committee or the governing body, as applicable. Added 2005, No. 16, § 1, eff. July 1, 2005.

8 V.S.A. § 31308 Duties of officers, directors, and committee members

31308. Duties of officers, directors, and committee members (a) All officers, directors, and members of any committees of a credit union subject to the laws of this State under this title shall comply with the standards for such officers and directors established under Title 11B. Members of committees of credit unions shall comply with the same standards as directors. (b) All officers, directors, and members of the supervisory or credit committees of a credit union subject to the laws of this State under this title shall administer the affairs of the credit union fairly and impartially and without discrimination in favor of or against any particular member. (c) All executive officers, directors, and committee members shall comply with the conflict of interest standards established pursuant to section 31313 of this title. Added 2005, No. 16, § 1, eff. July 1, 2005; amended 2011, No. 21, § 11.

8 V.S.A. § 31309 Oaths of office; certificate of election

31309. Oaths of office; certificate of election (a) Within 10 days after election to any position, each person so elected or appointed shall execute an oath of office by which he or she agrees to accept, and diligently and faithfully to carry out, the duties and responsibilities of the position to which he or she has been elected and not negligently or willfully to violate, or permit to be violated, any provision of this title or the bylaws of the credit union. (b) The chairperson of the governing body and the secretary shall execute a certificate of election, which shall set forth the names and addresses of the officers, directors, and committee members elected or appointed. (c) The oath of office and the certificate of election shall be executed on forms prepared by the Department, and one copy of each shall be filed with the Department within 15 days after the election or appointment. Added 2005, No. 16, § 1, eff. July 1, 2005.

8 V.S.A. § 31310 Prohibited management interlocks

31310. Prohibited management interlocks (a) Except with the Commissioner’s prior written approval, a director, officer, or employee of any other credit union or financial institution shall not at the same time be a director, officer, or employee of a credit union with a place of business or doing business in the State of Vermont. (b) The terms of this section shall not apply to: (1) a credit union that is in liquidation, receivership, conservatorship, or similar proceedings; (2) a corporate credit union; (3) a credit union service organization affiliated by reason of common ownership or control of at least 25 percent of the voting interest of such affiliated credit union service organization; or (4) any other relationship otherwise permitted under guidelines or regulations of federal supervisory authorities or the Commissioner adopted from time to time, relating to management interlocks. Added 2005, No. 16, § 1, eff. July 1, 2005.

8 V.S.A. § 31311 Suspension and removal

31311. Suspension and removal (a) The governing body of a credit union shall have the power to remove, by a two-thirds vote of its members at a regular or special meeting, a director or a governing-body-appointed committee member: (1) who fails, without good cause, to attend three consecutive meetings of the governing body or committee or one-half of such meetings held during a calendar year; (2) who is no longer qualified to serve; or (3) for any of the causes enumerated and in accordance with subsection (b) of this section. (b) The governing body of a credit union shall have the power to suspend at any time, by a two-thirds’ vote of its members, at a regular or special meeting, any director, member of a governing-body-appointed committee, officer, or agent for good cause, including: (1) a violation of any statute, regulation, or order applicable to such credit union; (2) the participation in any unsafe or unsound practice in connection with such credit union; (3) the commission of or participation in a crime that is punishable by imprisonment for a term exceeding one year under state or federal law, as charged in any information, indictment, or complaint, and if continued service or participation by such director, member of a governing-body-appointed committee, officer, or agent may pose a threat to the interests of the members of such credit union; (4) the failure of such person to perform his or her duties or breach of his or her fiduciary duty; (5) the use of his or her official position in a manner contrary to the interests of the credit union or its members; and (6) the breach of a written agreement with the Commissioner. (c) The suspension shall take effect immediately, and the Commissioner shall be notified promptly of such suspension. Within seven business days after the effective date of the suspension, the governing body shall cause notice to be given to all members of the credit union of a special meeting of members to be held for the purpose of hearing the report of the governing body regarding the suspension and voting on removal, provided such notice shall not be given if the director, member of a governing-body-appointed committee, officer, or agent who is subject to suspension resigns. The special meeting shall be held no more than 21 business days after the effective date of the suspension. The membership of the credit union shall have, by majority vote, the authority to accept or reject the report of the governing body. If such action involves removal, the credit union shall promptly notify the Commissioner of such removal. (d) If any person required to be bonded by this part or by applicable regulation shall cease to be bonded or shall lose his or her ability to be bonded, such person shall be suspended and removed immediately, and the Commissioner shall be notified promptly of such suspension and removal. (e) The supervisory committee shall have the power to suspend at any time, by a two-thirds vote of its members at a meeting called for that purpose, any director, member of a governing-body-appointed committee, officer, or agent for cause. The suspension shall take effect immediately, and the Commissioner shall be notified promptly of such suspension. Not later than seven business days after the effective date of the suspension, the supervisory committee shall cause notice to be given to all members of the credit union of a special meeting of members to be held for the purpose of hearing the report of the supervisory committee regarding the suspension and voting on removal, provided such notice shall not be given if the person who is subject to suspension resigns. The special meeting shall be held not more than 21 business days after the date of suspension. The membership of the credit union shall have the authority to accept or reject the report of the supervisory committee. The supervisory committee shall take any related action as the members deem necessary. If such action involves removal, the credit union shall promptly notify the Commissioner of such removal. Added 2005, No. 16, § 1, eff. July 1, 2005; amended 2021, No. 105 (Adj. Sess.), § 327, eff. July 1, 2022.

8 V.S.A. § 31312 Vacancies

31312. Vacancies A vacancy on the governing body, the supervisory committee, or any other governing-body-appointed or member-elected committee that exists due to the death, resignation, or removal of a director or committee member shall be filled by majority vote of the remaining directors, regardless of whether the remaining directors constitute a quorum. A director or committee member appointed by the governing body to fill a vacancy on a committee where the members elect the members of such committee shall hold office until the next annual meeting, at which time the members of the credit union shall vote to fill the remainder of the unexpired term. Added 2005, No. 16, § 1, eff. July 1, 2005.

8 V.S.A. § 31313 Conflict of interest

31313. Conflict of interest (a) The governing body of a credit union shall adopt a written conflict of interest policy that includes provisions addressing transactions with insiders, employees, volunteers, and their immediate family members, and other persons having a common ownership, investment, or other pecuniary interest in a business enterprise with such insiders and immediate family members of such persons. (b) An extension of credit to an insider, other than a residential real estate loan secured by a first lien on property that is owned or will be owned by the insider as a primary residence, shall require the approval of the governing body if such insider is the debtor, guarantor, endorser, or cosigner of the extension of credit. If the insider is a member of the governing body, an extension of credit shall require the approval of the supervisory committee as well as the approval of the noninterested members of the governing body. Notwithstanding the foregoing, a loan to an insider that, when aggregated with the amount of all other extensions of credit to such insider and to all related interests and all related persons of such insider, would not exceed five percent of the credit union’s unimpaired capital and surplus or $25,000.00, whichever is less, may be approved solely by a majority of the noninterested members of any one of the following committees: (1) the credit committee, if any; (2) the supervisory committee; or (3) the governing body. (c) An insider of a credit union, or a professional retained by a credit union, shall not, directly or indirectly, participate in any decision affecting such person’s pecuniary interest or the pecuniary interest of any immediate family member, or any corporation, partnership, or association other than the credit union in which such person is directly or indirectly interested. (d) An insider, an immediate family member of such insider, or any other person having a common ownership, investment, or other pecuniary interest in a business enterprise with an insider or immediate family member of such insider shall not obtain an extension of credit from the credit union with preferential rates, terms, or conditions, or act as guarantor or endorser thereon and shall not be involved in the appraisal or valuation of assets that are to be used as collateral for an extension of credit to such person. (e) No insider or immediate family member of such insider shall receive, directly or indirectly, any commission, fee, or other compensation, except those of a nominal value, in connection with any extension of credit by the credit union. Notwithstanding the foregoing, this subsection: (1) shall not prohibit payment by a credit union of: (A) salaries to employees; (B) incentives or bonuses to employees based on the credit union’s overall financial performance; (C) incentives or bonuses to employees, other than a member of senior management, in connection with an extension of credit, provided the governing body establishes written policies and internal controls in connection with such incentives or bonuses and monitors compliance with such policies and controls at least annually; (D) fees to an insider or immediate family member of such insider for the performance of title searches, loan closings, and collections, provided the credit union has complied with subsection (k) of this section prior to engaging such insider or immediate family member of such insider; and (2) shall not prohibit a director, member of a governing-body-appointed committee, or employee who is not a member of senior management or an immediate family member of such director, committee member, or employee, from receiving compensation from a person unrelated to the credit union for a service or activity performed unrelated to the credit union, provided no referral has been made by the credit union or the director, committee member, employee, or immediate family member of such director, committee member, or employee. (f) No insider or his or her immediate family members or an employee of a credit union shall receive anything of value in connection with the making of an investment or deposit of credit union funds by the credit union, unless the governing body determines that the involvement of the insider, his or her immediate family member, or the employee does not present a conflict of interest and includes such determination in its minutes. The prohibition contained in this subsection shall not prohibit the credit union from paying salaries, incentives, and bonuses to employees in connection with the making of such investments or deposits. An insider shall conduct all transactions that are not prohibited under this subsection at arm’s length and in the best interests of the credit union. (g) No insider or his or her immediate family members shall receive any direct or indirect compensation or benefit in connection with the credit union’s insurance or group purchasing activities for members and employees. The prohibition contained in this subsection shall also apply to any employee not otherwise covered if the employee is directly involved in insurance or group purchasing activities, unless the governing body determines that the employee’s involvement does not present a conflict of interest and includes such determinations in its minutes. An insider and his or her immediate family member shall conduct all transactions that are not prohibited under this subsection at arm’s length and in the best interests of the credit union. (h) A credit union shall not buy, lease, or otherwise acquire premises from any of the following without the prior approval of the governing body, such approval to be included in the governing body’s minutes: (A) an insider or his or her immediate family member; (B) a corporation in which an insider or immediate family member is an officer or director or has an ownership interest of ten percent or more; or (C)(1) a partnership in which any insider or his or her immediate family member is a general partner or a limited partner with an interest of ten percent or more. (2) The prohibition contained in this subsection shall also apply to any employee not otherwise covered if the employee is directly involved in investments in fixed assets, unless the governing body determines that the employee’s involvement does not present a conflict of interest and includes such determinations in its minutes. (i) No insider, employee, or any immediate family member of such insider or employee shall purchase, directly or indirectly, any of the assets of the credit union for an amount less than the current market value thereof without the prior approval of the governing body, which approval shall include a determination that the transaction is in the best interests of the credit union. Such approval and determination shall be included in the governing body’s minutes. (j) With the prior written approval of the Commissioner, a credit union may have as an employee or director a person who serves as an officer, employee, or director of any other financial institution. (k) When a credit union retains an insider or his or her immediate family member to render services to the credit union, the hiring shall be approved by the noninterested members of the governing body, and the governing body shall document in its minutes that such hiring was at arm’s length, was in the best interests of the credit union, and was in accordance with the competitive bidding and appropriate due diligence process as provided in the credit union’s conflict of interest policy. (l) The directors, committee members, members of senior management, and the immediate family members of such persons that have outstanding loans or investments in a credit union service organization shall not receive any salary, commission, investment income, or other income or compensation from such credit union service organization, either directly or indirectly, or from any person being served through the credit union service organization. This provision shall not prohibit: (1) such credit union insiders or the immediate family members of such persons from assisting in the operation of such credit union service organization, provided such persons are not compensated by the credit union service organization; and (2) reimbursement to the credit union for the services provided by such directors, committee members, or senior management members if the credit union service organization pays in full the amounts due to the credit union at least quarterly. (m) A credit union shall not grant a member business loan if any additional income received by the credit union or senior management of the credit union is tied to the profit or sale of the business or commercial endeavor for which the loan is made. Added 2005, No. 16, § 1, eff. July 1, 2005.

8 V.S.A. § 31314 Compensation; insurance; expenses

31314. Compensation; insurance; expenses (a) No officer of the governing body, no director, nor any committee member, other than the treasurer, may be compensated for services as such. However, providing reasonable health, accident, and similar insurance protection shall not be considered compensation. (b) A credit union may, with the approval of a majority of the governing body, provide personal liability or indemnity insurance coverage for its directors and other committee members. (c) Directors, officers of the governing body, and committee members may be reimbursed for necessary expenses incidental to the performance of official business of the credit union. (d) Notwithstanding the foregoing, directors, officers of the governing body, and committee members may be compensated for services, other than duties performed as such director, officer of the governing body, or committee member, in accordance with the conflict-of-interest provision set forth in section 31313 of this title. Added 2005, No. 16, § 1, eff. July 1, 2005.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/08/221Fetched: 10/21/2026