Members Credit Union
Excessive or Luxury Expenditures
Policy August 2023
Purpose
The purpose of this policy is to establish parameters and internal controls governing the expenditures of Members Credit Union
(Members CU). Expenditures of Members CU should be customary, prudent, consistent with applicable laws and regulations,
and reasonably related to Members CU's business objectives and needs. This policy identifies expenditures that are excessive
or luxury expenditures, creates processes that are reasonably designed to eliminate such expenditures, and establishes accountability
for compliance. Routine operating expenses, capital expenditures, and other reasonable expenses are not prohibited by this policy.
Authority
Members CU has authority to provide compensation and benefits that are reasonable. This policy establishes a prohibition on
expenditures that are excessive, or luxury expenditures as required by the Department of the Treasury's Emergency Capital Investment
Program regulations (31 CFR part 35), and as may be required by other statutes and regulations.
Responsibility
This policy is the responsibility of Members CU's board of directors (board). The board has approved this policy and will review
compliance with this policy no less frequently than annually, and summary data on excessive or luxury expenditures will be
reported to the board as part of the compliance review.
Scope
This policy applies to all employees, officers, and directors of Members CU with regard to any expenditure of Members CU.
In making any expenditure on behalf of Members CU, employees, officers, and directors should consider whether the expenditure
is an excessive or luxury expenditure that is prohibited under this policy.
Excessive or Luxury Expenses
“Excessive or luxury expenditures” means excessive expenditures on any of the following to the extent not reasonable or appropriate
expenditures for business development, staff development, reasonable performance incentives, or other similar reasonable measures
conducted in the normal course of Members CU's business operations:
Entertainment or events. This category includes fees, dues, tickets costs related to social, athletic, artistic and dining clubs,
activities, celebrations or other events, and similar expenditures. Expenditures for charitable contributions and charitable
events are not prohibited under this policy. Entertainment or events expenditures in an amount less than $500 per instance,
and $2,000 on an annual aggregate basis per individual, are exempt from this policy.
• Office and facility renovations. This category includes costs and allowances for office renovation, including expenditures
related to furniture, art, office personalization, interior finishing, design and decoration, and similar expenditures. Office and
facility renovations expenditures in an amount less than $10,000 per instance, and $10,000 on an annual aggregate basis per individual,
are exempt from this policy.
Aviation or Other Transportation Services
• This category includes charter fees, tickets, slip or docking fees, vehicle installment payments, reservation and travel agent expenses,
and similar expenditures associated with transportation services (e.g, airline, train, rental cars, or vans). Mileage reimbursable
according to current Internal Revenue Service mileage rates is exempt from this policy. Transportation services in an amount
less than $1,500 per instance, and $10,000 on an annual aggregate basis per individual, are exempt from this policy.
• For the avoidance of doubt, reasonable capital investments in technology, equipment, and similar items that expand the
long-term capability of an ECIP recipient to provide products and services to its customers and community are not
excessive or luxury expenditures.
• The principal executive officer may establish or delegate to an appropriate executive officer the authority to establish
processes for the evaluation and approval of expenditures in the preceding categories that are not luxury or excessive
expenditures. and that are not otherwise exempt from this policy. These processes must be reviewed by executive
management no less frequently than annually, as well as any additional threshold expenditure amounts per item,
activity, or event, or a threshold expenditure amount per employee receiving the item or participating in the activity
or event under this policy. Such approvals must be reported to the board of directors (which may be in an appropriate
summary form) no less frequently than annually.
Exceptions or Violations
Any exception or violation of this policy must be promptly reported to Members CU's (i) principal executive officer, (ii) officer
with primary responsibility for Members CU's compliance function, or (iii) officer designated with primary responsibility for
overseeing the administration, monitoring, and compliance with this policy. Exceptions and violations must be reported to the
board of directors no less frequently than annually, or more frequently as the nature and severity of violation may warrant. All
employees, officers, and directors of Members CU must adhere to this policy and will be held accountable for compliance. Any
employee or officer who violates this policy may be subject to disciplinary action up to and including termination of employment.
Any employee or officer that is aware of any circumstance that may indicate a violation of this policy is required to report such
circumstance to their supervisor or Members CU's principal compliance officer or compliance group. Members CU prohibits
retaliation against any employee or officer for making a good faith report of actual or suspected violations of Members CU's code
of conduct, laws, regulations, or other Organization policies, including this policy. A finding of retaliation against any such
employee or officer may result in disciplinary action up to and including termination. Failure to promptly report known
violations by others may also be deemed a violation of Members CU's code of conduct.
Certifications
On an annual basis, the ECIP recipient will deliver to the Department of the Treasury a certification, executed by two senior executive
officers (one of which must be either the ECIP recipient's principal executive officer or principal financial officer) certifying that
(i) Members CU is in compliance with this policy and (ii) the approval of any expenditure requiring the prior approval of any
senior executive officer, any executive officer of a substantially similar level of responsibility, or the board of directors
(or a committee of such board), was properly obtained with respect to each such expenditure.