Coasthills Credit Union

“The credit union has an executive committee that the board of directors appoint to act as expressly approved by the board of directors in accordance with applicable laws, rules and regulations.”

“Participation in this credit union is limited to those who qualify for membership as defined in the credit union's charter and bylaws. This generally consists of individuals who live, work, worship, or go to school within the counties of santa cruz, monterey, san luis obispo, santa barbara or ventura, california, as well as any and all businesses, corporations, and other legal entities located within the counties of santa cruz, monterey, san luis obispo, santa barbara or ventura, california, who have petitioned for membership. In addition to a regularly qualified member, the spouse of a member, the blood or adoptive relatives of either of them and their spouses may be members.”

“All holders of basic shares are allowed to vote in annual election for members of the board of directors and supervisory committee.”

“Matters concerning the allowed number of directors, ability of the membership to vote by mail, or dissolution of the credit union requires approval by the membership.”

“The form 990 is prepared by the organization's public accounting firm based on information provided by management. Once the draft is available, it is reviewed by management and any changes incorporated into the filing. Once this detailed review is complete, the return is filed with the irs.”

“Loans to officers, directors, and key employees are reported quarterly to the ncua and aggregated by social security number. The credit union vets prospective board and supervisory committee members for relatives who are credit union employees prior to be allowed on the ballot for election. We routinely monitor share and loan accounts for employees and volunteers. The parties and principals mentioned in contracts are reviewed for known relationships with the credit union prior to signing. Per the credit union's conflict of interest policy: a. Section 1205 board of directors - 1d. Limitations i. May not be compensated as a director. Ii. No person may serve as a voting member on the board of directors if their immediate family member is a paid coasthills employee. Iii. May not serve as a member of the board of directors and supervisory committee at the same time. B. Section 1205 loan officers section - 7c. Limitations i. Loan officers may not disburse funds for loans they approve ii. Loan officers may not approve loans for his/her immediate family or for any individual whose relationship with the loan officer represents a conflict of interest. Immediate family is defined in section 1150. C. Section 1205 nominating committee - 10c. Qualifications. Any member 18 or older may serve as a board member or supervisory committee member subject to the approval of coasthills bonding company. However, no person shall serve as a director, officer, committee member, or employee of the credit union who has been convicted of any criminal offense involving dishonesty or breach of trust. The nominating committee is also required to consider the following criteria for eligibility to serve as a board member or supervisory committee member. I. No negative shares ii. No delinquency iii. The member has not filed a lawsuit against coasthills; has not threatened to file a lawsuit against coasthills; or has shared an unfiled lawsuit. Iv. No conflict of interest exists that would effectively prevent the candidate from exercising independent judgement and acting in the best interest of coasthills. V. No former employee of coasthills credit union can serve as a board or supervisory committee member until 3 years have passed from their last day of employment.”

“The process for determining compensation of the ceo and key management officials includes executive compensation studies, sometimes more than one in a given year from different providers. Mclagan, cues, and allen dick have all provided recent ceo and executive management compensation information to the cu. Data related to the ceo is presented to the board via the board human resources committee. These decisions are recorded in the board executive committee minutes and confirmed by the entire board executive committee. A management compensation committee that includes the svp/hr as chair and executive team members vets and makes recommendations to the executive team for general employee compensation matters, including officer compensation. In certain cases the compensation committee may make decisions and report those to the executive team, especially for items not of a material nature. The executive team is the main influence for decisions with broad or organization-wide impact. An annual performance review process is in place that is documented by hr. Annually it is decided if merit and/or cost of living increases will be applied. The cu takes advantage of salary surveys in it's decisions on salary ranges, comparatios, etc. The current survey provider is mclagan. This decision is then documented in the employee's personnel file.”

“The governing documents, conflict of interest policy and financial statements are available upon request.”

“Cummulative effect of change in accounting principle -2,679,443.”