Board policies must reflect sound business practices, and federal and state laws and regulations. The board also must adhere to the credit union's charter and bylaws. The charter is the federal or state document that allows the credit union to form. The bylaws are the rules for membership and operation. The board also sees that the manager puts its policies into effect.
Many credit unions appoint members to conduct unannounced audits.
This group of volunteers goes by the name of supervisory, audit, or examining committee. The law requires federally chartered credit unions to have supervisory committees. Although not required by all state statures, nine of 10 credit unions have such committees. All financial institutions also must follow the dictates of government regulators. Credit unions with state charters and private deposit insurance have state regulators.