[Federal Register Volume 64, Number 1 (Monday, January 4, 1999)]
[Notices]
[Pages 187-198]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33947]
=======================================================================
-----------------------------------------------------------------------
NATIONAL CREDIT UNION ADMINISTRATION
Federal Credit Union Bylaws
AGENCY: National Credit Union Administration (NCUA).
ACTION: Notice and request for comment.
-----------------------------------------------------------------------
SUMMARY: The proposed changes consolidate the two manuals which
currently contain the federal credit union (FCU) bylaws into one manual
and eliminate or modernize several bylaws. This action is necessary
because several of the bylaws had become outdated or obsolete. The
proposal is intended to update and clarify the FCU bylaws.
DATES: Comments must be received by April 5, 1999.
ADDRESSES: Comments should be directed to Becky Baker, Secretary of the
Board.
Mail or hand-deliver comments to: National Credit Union
Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. You
may Fax comments to (703) 518-6319 or E-mail comments to
boardmail@ncua.gov. Please send comments by one method only.
FOR FURTHER INFORMATION CONTACT: Mary F. Rupp, Staff Attorney, Office
of General Counsel, National Credit Union Administration, 1775 Duke
Street, Alexandria, Virginia 22314-3428 or telephone: (703) 518-6553.
SUPPLEMENTARY INFORMATION:
Background
Section 108 of the Federal Credit Union Act (the Act) requires the
NCUA Board to prepare bylaws to be used by all federal credit unions
(FCUs). 12 U.S.C. 1758. The FCU bylaws are contained in two manuals
entitled Federal Credit Union Bylaws (FCU Bylaws) and Federal Credit
Union Standard Bylaw Amendments and Guidelines (Standard Amendments).
These manuals were last updated in December 1987 and October 1991,
respectively. The bylaws contained in the two manuals may be adopted by
an FCU without approval from NCUA. An FCU must obtain approval from its
Regional Director to adopt a bylaw not contained in the manuals.
On March 7, 1997, the NCUA Board issued a request for comments on
the FCU Bylaws and Standard Amendments. 62 FR 11778 (March 13, 1997).
The purpose of the request was to solicit comments to help guide the
preparation of revised bylaws that would clarify and reorganize
existing FCU bylaws. The Board received 29 comments.
Summary of Comments
The Board requested comment on four specific issues, as well as any
additional comments that would assist the Board in streamlining and
modernizing the FCU Bylaws. The four specific issues and the comments
are as follows:
1. Should the bylaws be published as a regulation? Twenty of the
twenty-three commenters that responded to this question opposed
publishing the bylaws as a regulation. These commenters noted that: it
is rare for NCUA to get involved in a bylaw dispute; NCUA should not be
enforcing the bylaws, because they are a contract between the FCU and
its members; NCUA would have to go through the rulemaking process for
an FCU to change its bylaws; and bylaws are primarily for internal self
governance and don't raise safety and soundness issues.
Because the commenters were overwhelmingly opposed to publishing
the bylaws as a regulation and made a persuasive argument in support of
this position, the NCUA Board will publish the bylaws as a manual.
Although the Act requires FCUs to use the bylaws published by NCUA,
FCUs will continue to have the flexibility to request a nonstandard
bylaw amendments if the need arises.
2. Should the bylaws be consolidated in one publication? We asked
for comment on whether the FCU Bylaws and Standard Amendments should be
published in one place with alternative provisions side by side when
necessary. Sixteen of the seventeen commenters that responded to this
question said yes. The recurring reason given in support of
consolidation was that it would provide for easier reference and
improve efficiency. The California Credit Union League advised that it
works well for California state chartered credit unions and provided a
copy of the California bylaws. This document was very helpful in
drafting the proposed consolidated bylaws.
3. Should outdated bylaws be eliminated? Sixteen of the nineteen
commenters that responded to this question answered yes. Some of the
bylaws frequently suggested for deletion were those addressing share
accounts, lost/stolen passbook procedures, stipulation on loans, late
fees, pre-payments, cash funds and operations following an attack on
the United States. It was suggested that a FCU that wishes to retain a
bylaw that is outdated for most FCUs could adopt a policy. It was also
suggested that a committee be formed to help decide which bylaws are
outdated.
The proposal deletes several outdated provisions. As several of the
commenters suggested, NCUA staff worked closely with the credit union
trade groups to ensure that FCUs' voices were heard before deleting a
provision.
4. Should FCUs be required to adopt the revised bylaws? Eighteen of
the twenty-two commenters that responded to this question answered no.
The reasons cited for this response were that credit unions should have
maximum flexibility; uniformity is not necessary; forcing FCUs to
change the way they do business will create an unnecessary regulatory
burden; and current bylaws work well for a large number of FCUs.
Because of the overwhelming opposition to this requirement, FCUs,
although strongly encouraged to adopt the revised bylaws, are not
required to do so and may continue to use their previously approved FCU
Bylaws.
Proposed FCU Bylaws
The bylaws have been revised so that they are more user friendly
for FCUs. All of the information is now in one place; plain English is
used; provisions that are outdated are deleted; and provisions that are
operational or covered in the Accounting Manual or regulations are
deleted, unless it was determined that because of their importance they
should also be included in the bylaws. An index will be provided with
the final version of the bylaws. Currently, there is only an index for
the FCU Bylaws and not the Standard Amendments.
Article by Article Analysis
The following articles and sections have no substantive changes.
There may be some minor editing or technical corrections:
Article I, Sections 1 and 2;
Article II, Sections 1, 2, and 4 (renumbered 3);
Article III, Sections 1, 2 and 5 a, b, d (renumbered c) and e
(renumbered d);
Article V (renumbered Article IV), Sections 1, 4 and 5;
Article VI (renumbered Article V), Sections 3, 4, 5 and 6;
Article VII (renumbered Article VI), Sections 1, 2 (renumbered Section
3), 6 (renumbered Section 7) and 8 (renumbered Section 9);
Article VIII (renumbered Article VII), Sections 1, 2, 4 (renumbered 5)
a, c
[[Page 188]]
(renumbered b), e and f (renumbered d and e), 7, 8, 9, and 10
(renumbered 8, 9, 10, and 11);
Article X (renumbered Article IX), Sections 2-6;
Article XI, (renumbered Article X), Sections 1-3;
Article XII (renumbered Article XI), Section 8 (renumbered Section 3);
Article XIV (renumbered Article XII), Section 1;
Article XVI (renumbered Article XIV), Section 1;
Article XVII (renumbered Article XV), Section 1;
Article XVIII (renumbered Article XVI), Section 1;
Article XIX (renumbered Article XVII), Sections 1, 2, 5 and 6; and
Article XXI (renumbered Article XVIII), Section 1.
The following articles and sections have substantive changes:
Article II, Qualifications for Membership
Section 3 has been deleted. It required a credit union to assign
each member a number as a means of identifying the member's account.
This is an operational matter that does not belong in the bylaws.
Section 5 has been deleted because the ``once a member always a
member'' policy is now addressed in the Act.
Article III, Shares of Members
In Section 3, the requirement that the credit union allow at least
six months for a member to pay one share has been deleted. Section 1 of
this Article and the Act require credit unions to allow for the payment
of shares in installments. 12 U.S.C. 1759.
The $1 fee limitation on share transfers has been deleted from
Section 4.
Section 5(c) addressed withdrawal of shares pledged as security.
This has been deleted because it should be addressed in the loan
agreement. The first paragraph of Section 5(e) has been deleted because
it referenced Article II, Section 5 which has been deleted. Section
5(f) addressed fees for excessive share withdrawals. This is covered by
our Truth in Savings Act regulation and has been deleted. 12 CFR 707.
Section 6(a) and (b) have been combined for easier reading and (c) has
been deleted.
Article IV, Receipting for Money--Passbooks
This Article has been deleted. It covered operational procedures of
the credit union and does not belong in the bylaws.
Article V--Renumbered Article IV, Meetings of Members
In Section 2, the time frame for notification of the annual meeting
has been changed from ``at least 7days'' to ``at least 30 but no longer
than 75 days.''
Section 3 has been revised to allow directors to call a special
meeting. This is currently a standard amendment. In addition, the
maximum number of members necessary to call a special meeting has been
changed from 200 to 500.
Article VI--Renumbered Article V, Elections
An FCU elects the voting method it wishes to follow by checking the
appropriate box. The choices provided are currently contained in the
FCU Bylaws and Standard Amendments. An additional electronic voting
option has been added. In addition, the absentee ballot provision from
the Standard Amendments has been included as an option the FCU may
elect by checking the box.
In Section 7, the age to vote has been changed from ``not greater
than 16'' to ``not greater than 18'' because this is the age of legal
majority in most states.
Article VII--Renumbered Article VI, Board of Directors
Section 2 has been added. This provision allows a credit union to
elect an option currently available in the Standard Amendments limiting
the number of directors and family members of directors who can be paid
employees of the credit union and electing whether or not the
management official and assistant management official may serve on the
board.
Section 3 is renumbered Section 4 and the phrase ``within a
reasonable time'' has been added to the provision requiring the board
to fill vacancies on the board and committees until the next annual
meeting.
Section 4 is renumbered Section 5. It adopts the Standard Amendment
requirement of at a minimum one face-to-face board meeting each
calendar quarter. The FCU Bylaws require monthly, in person board
meetings.
Section 5 is renumbered Section 6. It combines the Standard
Amendment option of no credit committee with the FCU Bylaw of a credit
committee. The no credit committee option adds a new provision allowing
the board to appoint a mid-level loan review committee but, in
compliance with the Act, still requires the board to review all appeals
of loan denials. The mid-level loan review committee is currently being
used by some FCUs through a nonstandard bylaw amendment.
Section 7 is renumbered Section 8. It allows the board to declare a
position vacant if a director or credit committee member misses 3
consecutive meetings or 4 meetings within a calendar year. This is a
combination of the FCU Bylaws and the Standard Amendments.
Article VIII--Renumbered Article VII. Board Officers, Management
Officials and Executive Committee
The requirement that the executive officer countersign all notes,
etc. has been deleted from Section 3 and a new Section 4 has been added
that requires the board to approve all individuals authorized to sign
notes, etc.
Section 5 is renumbered Section 6. Subsection (b) is deleted
because it is covered by the addition of Section 4. Subsection (d) is
renumbered (c) and the time frame is changed from 7 to 20 days, an
option available in the standard amendment.
Section 6 is renumbered Section 7. The prohibition against the
manager and assistant manager serving on the board is deleted because
it is now addressed in Article VI, Section 2.
The suggested titles have been deleted from the Addendum and the
board has been directed to identify the positions. In an effort to be
consistent throughout the bylaws, the following terms have been
replaced: ``executive officers'' with ``board officers'', ``executive
officer'' with ``chair'', ``assistant executive officer'' with ``vice
chair'' and ``recording officer'' with ``secretary''.
Article IX--Renumbered Article VIII. Option 1 Credit Committee or
Option 2 Loan Officers
An FCU selects Option 1 if it has a credit committee and Option 2
if it doesn't. The Options mirror the current FCU Bylaws and Standard
Amendments.
Article X--Renumbered Article IX. Supervisory Committee
Section 1 is modified slightly to allow the terms of the
supervisory committee to be staggered in the same way that the terms of
the credit committee are.
Article XII--Renumbered Article XI. Loans and Lines of Credit to
Members
Section 1 is taken from the standard amendment that allows FCUs to
make loans to nonnatural persons under certain limited circumstances.
The FCU Bylaws only allow loans to nonnatural persons if the loan is
share secured. Some of the commenters asked the Board to expand this
provision beyond the standard amendment. The Board has safety and
soundness concerns with expanding this provision beyond what
[[Page 189]]
is allowed in the standard amendment but is interested in receiving
additional comment on this issue.
Sections 2-7 have been deleted and replaced with the requirement
that the FCU follow applicable law and regulations. All of the
requirements in deleted Sections 2-7 were either operational or set
forth in NCUA's regulations.
Article XIII. Reserves
This provision has been deleted because it is covered in the Act
and regulations.
Article XIV--Renumbered Article XII. Dividends
Sections 2 and 3 have been deleted because they are covered in the
Act and regulations.
Article XV--Renumbered Article XIII. Deposit and Disbursement of
Funds-Investments and Borrowings
Retitled Deposit of Funds. Section 1 is modernized by allowing FCUs
to fill in the number of days and the amounts. Sections 2-5 are deleted
because they are operational.
Article XVIII--Renumbered Article XVI. Definitions
Section 2(a) is deleted because ``members of their immediate
families'' will be defined in NCUA's regulations.
Article XIX--Renumbered Article XVII. General
Section 3 follows the standard amendment which limits the
membership's authority to remove to directors, committee members or
officers and does not provide the authority to remove employees.
Section 4 is the conflict of interest provision for directors,
committee members, officers and employees. It has been expanded to
prohibit participation not only in matters affecting their pecuniary
interest but also matters affecting their personal interest. Personal
interest is intended to include matters affecting their family members.
Section 7 requires the member to keep the board informed of his
current address but deletes the discussion on permissible fees.
Section 8 adds the provision from the standard amendments that
allows the board to indemnify officials and employees in accordance
with the laws of the state or the Model Business Corporation Act.
Article XX. Operations Following an Attack on the United States
This provision is deleted from the bylaws. FCUs may adopt a board
policy setting forth the FCU's policy in the event of an attack.
Request for Comment
The Board is interested in receiving comments on the proposed
format of the FCU Bylaws, as well as any substantive issues the
commenters wish to see addressed in the final bylaws.
By the National Credit Union Administration Board on December
17, 1998.
Becky Baker,
Secretary of the Board.
BYLAWS
Federal Credit Union, Charter No. ________
(A corporation chartered under the laws of the United States)
Article I. Name--Purposes
Section 1. The name of this credit union is as stated in section 1
of the charter (approved organization certificate) of this credit
union.
Section 2. The purpose of this credit union is to promote thrift
among its members by affording them an opportunity to accumulate their
savings and to create for them a source of credit for provident or
productive purposes.
Article II. Qualifications for Membership
Section 1. The field of membership of this credit union is limited
to that stated in section 5 of its charter.
Section 2. Applications for membership from persons eligible for
membership under section 5 of the charter must be signed by the
applicant on forms approved by the board. Upon approval of an
application by a majority of the directors, or a majority of the
members of a duly authorized executive committee or by a membership
officer, and upon subscription to at least one share of this credit
union and the payment of the initial installment, and the payment of a
uniform entrance fee if required by the board, the applicant is
admitted to membership. If a membership application is denied, the
reasons must be furnished in writing to the person whose application is
denied, upon written request.
Section 3. A member who withdraws all shareholdings or fails to
comply with the time requirements in article III, section 3, ceases to
be a member. By resolution, the board may require persons readmitted to
membership to pay another entrance fee.
Article III. Shares of Members
Section 1. The par value of each share shall be $____. Subscription
to shares are payable at the time of subscription, or in installments
of at least $____ per month.
Section 2. The maximum amount of shares that may be held by any one
member shall be established from time to time by resolution of the
board.
Section 3. A member who fails to complete payment of one share
within ____ of admission to membership, or within ____ from the
increase in the par value of shares, or a member who reduces the share
balance below the par value of one share and does not increase the
balance to at least the par value of one share within ____ of the
reduction may be terminated from membership.
Section 4. Shares may only be transferred from one member to
another by a written instrument in a form as the board may prescribe.
Such transfer will carry dividend credits with it.
Section 5. Money paid in on shares or installments of shares may be
withdrawn as provided in these bylaws or regulation on any day when
payment on shares may be made: Provided, however, That
(a) The board has the right, at any time, to require members to
give, in writing, not more than 60 days notice of intention to withdraw
the whole or any part of the amounts so paid in by them.
(b) The board may determine that, if shares are paid in under an
accumulated payroll deduction plan as prescribed in the Accounting
Manual for Federal Credit Unions, they may not be withdrawn until
credited to members' accounts.
(c) No member may withdraw any shareholdings below the amount of
his primary or contingent liability to the credit union if he is
delinquent as a borrower, or if borrowers for whom he is comaker,
endorser, or guarantor are delinquent, without the written approval of
the credit committee or loan officer; except that shares issued in an
irrevocable trust as provided in section 6 of this article are not
subject to restrictions upon withdrawal except as stated in the trust
agreement.
(d) The share account of a deceased member (other than one held in
joint tenancy with another member) may be continued until the close of
the dividend period in which the administration of the deceased's
estate is completed, but not to exceed a period of 4 years.
Section 6. Shares may be issued in a revocable or irrevocable
trust, subject to the following:
When shares are issued in a revocable trust, the settlor must be a
member of this credit union in his own right. When shares are issued in
an irrevocable trust, the settlor or the beneficiary must be a member
of this credit union in his own
[[Page 190]]
right. The name of the beneficiary must be stated in both a revocable
and irrevocable trust. For purposes of this section, shares issued
pursuant to a pension plan authorized by the rules and regulations
shall be treated as an irrevocable trust unless otherwise indicated in
the rules and regulations.
Article IV. Meetings of Members
Section 1. The annual meeting of the members must be held within
the period authorized in the Act, in the county in which the office of
the credit union is located or within a radius of 100 miles of such
office, at the time and place as the board determines and announces in
the notice of the annual meeting.
Section 2. At least 30 but no more than 75 days before the date of
any annual meeting or at least 7 days before the date of any special
meeting of the members, the secretary must give written notice to each
member by in person delivery, or by mailing the written notice to each
member at the address that appears on the records of this credit union.
Notice of the annual meeting may be given by posting the notice in a
conspicuous place in the office of this credit union where it may be
read by the members, at least 30 days prior to such meeting, if the
annual meeting is to be held during the same month as that of the
previous annual meeting and if this credit union maintains an office
that is readily accessible to members where regular business hours are
maintained. Any meeting of the members, whether annual or special, may
be held without prior notice, at any place or time, if all the members
entitled to vote, who are not present at the meeting, waive notice in
writing, before, during, or after the meeting.
Notice of any special meeting must state the purpose for which it
is to be held, and no business other than that related to this purpose
may be transacted at the meeting.
Section 3. Special meetings of the members may be called by the
chair or the board of directors upon a majority vote, or by the
supervisory committee as provided in these bylaws, and may be held at
any location permitted for the annual meeting. A special meeting must
be called by the chair within 30 days of the receipt of a written
request of 25 members or 5% of the members as of the date of the
request, whichever number is larger. However, a request of no more than
500 members may be required for such meeting. The notice of a special
meeting must be given as provided in section 2 of this article.
Section 4. The order of business at annual meetings of members must
be--
(a) Ascertainment that a quorum is present.
(b) Reading and approval or correction of the minutes of the last
meeting.
(c) Report of directors.
(d) Report of the financial officer or the chief management
official.
(e) Report of the credit committee, if there is one.
(f) Report of the supervisory committee.
(g) Unfinished business.
(h) New business other than elections.
(i) Elections.
(j) Adjournment.
The members assembled at any annual meeting may suspend the above
order of business upon a two-thirds vote of the members present at the
meeting.
Section 5. Except as otherwise provided, 15 members constitutes a
quorum at annual or special meetings. If no quorum is present, an
adjournment may be taken to a date not fewer than 7 nor more than 14
days thereafter. The members present at any such adjourned meeting will
constitute a quorum, regardless of the number of members present. The
same notice must be given for the adjourned meeting as is prescribed in
section 2 of this article for the original meeting, except that such
notice must be given not fewer than 5 days previous to the date of the
meeting as fixed in the adjournment.
Article V. Elections
The Credit Union must select one of the four voting options. This
may be done by printing the credit union's bylaws with the option
selected or retaining this copy and checking the box of the option
selected.
{time} Option A1--In-person elections; nominating committee and
nominations from floor
Section 1. At least 30 days prior to each annual meeting, the chair
will appoint a nominating committee of not fewer than three members. It
is the duty of the nominating committee to nominate at least one member
for each vacancy, including any unexpired term vacancy, for which
elections are being held, and to determine that the members nominated
are agreeable to the placing of their names in nomination and will
accept office if elected.
Section 2. After the nominations of the nominating committee have
been placed before the members, the chair calls for nominations from
the floor. When nominations are closed, tellers are appointed by the
chair, ballots are distributed, the vote is taken and tallied by the
tellers, and the results announced. All elections are determined by
plurality vote and will be by ballot except where there is only one
nominee for the office.
{time} Option A2--In-person elections; nominating committee and
nominations by petition
Section 1. At least 120 days prior to each annual meeting the chair
will appoint a nominating committee of not fewer than three members. It
is the duty of the nominating committee to nominate at least one member
for each vacancy, including any unexpired term vacancy, for which
elections are being held, and to determine that the members nominated
are agreeable to the placing of their names in nomination and will
accept office if elected. The nominating committee files its
nominations with the secretary of the credit union at least 90 days
prior to the annual meeting, and the secretary notifies in writing all
members eligible to vote at least 75 days prior to the annual meeting
that nominations for vacancies may also be made by petition signed by
1% of the members with a minimum of 20 and a maximum of 500.
The written notice must indicate that the election will not be
conducted by ballot and there will be no nominations from the floor
when there is only one nominee for each position to be filled. A brief
statement of qualifications and biographical data in a form approved by
the board of directors will be included for each nominee submitted by
the nominating committee with the written notice to all eligible
members. Each nominee by petition must submit a similar statement of
qualifications and biographical data with the petition. The written
notice must state the closing date for receiving nominations by
petition. In all cases, the period for receiving nominations by
petition must extend at least 30 days from the date that the petition
requirement and the list of nominating committee's nominees are mailed
to all members. To be effective, such nominations must be accompanied
by a signed certificate from the nominee or nominees stating that they
are agreeable to nomination and will serve if elected to office. Such
nominations must be filed with the secretary of the credit union at
least 40 days prior to the annual meeting and the secretary will ensure
that nominations by petition along with those of the nominating
committee are posted in a conspicuous place in each credit union office
at least 35 days prior to the annual meeting.
Section 2. All persons nominated by either the nominating committee
or by
[[Page 191]]
petition must be placed before the members. When nominations are
closed, tellers are appointed by the chair, ballots are distributed,
the vote is taken and tallied by the tellers, and the results
announced. All elections are determined by plurality vote and will be
by ballot except where there is only one nominee for each position to
be filled.
Nominations cannot be made from the floor unless insufficient
nominations have been made by the nominating committee or by petition
to provide for one nominee for each position to be filled or
circumstances prevent the candidacy of the one nominee for a position
to be filled. Only those positions without a nominee are subject to
nominations from the floor. In the event nominations from the floor are
permitted and result in more than one nominee for a position to be
filled, when nominations have been closed, tellers are appointed by the
chair, ballots are distributed, the vote is taken and tallied by the
tellers, and the results announced. When only one member is nominated
for each position to be filled, the chair may take a voice vote or
declare each nominee elected by general consent or acclamation at the
annual meeting.
{time} Option A3--Election by ballot boxes or voting machine;
nominating committee and nomination by petition
Section 1. At least 120 days prior to each annual meeting the chair
will appoint a nominating committee of not fewer than three members. It
is the duty of the nominating committee to nominate at least one member
for each vacancy, including any unexpired term vacancy, for which
elections are being held, and to determine that the members nominated
are agreeable to the placing of their names in nomination and will
accept office if elected. The nominating committee files its
nominations with the secretary of the credit union at least 90 days
prior to the annual meeting, and the secretary shall notify in writing
all members eligible to vote at least 75 days prior to the annual
meeting that nominations for vacancies may also be made by petition
signed by 1% of the members with a minimum of 20 and a maximum of 500.
The written notice must indicate that the election will not be
conducted by ballot and there will be no nominations from the floor
when there is only one nominee for each position to be filled. A brief
statement of qualifications and biographical data in a form approved by
the board of directors will be included for each nominee submitted by
the nominating committee with the written notice to all eligible
members. Each nominee by petition must submit a similar statement of
qualifications and biographical data with the petition. The written
notice must state the closing date for receiving nominations by
petition. In all cases, the period for receiving nominations by
petition must extend at least 30 days from the date of the petition
requirement and the list of nominating committee's nominees are mailed
to all members. To be effective, such nominations must be accompanied
by a signed certificate from the nominee or nominees stating that they
are agreeable to nomination and will serve if elected to office. Such
nominations must be filed with the secretary of the credit union at
least 40 days prior to the annual meeting and the secretary will ensure
that nominations by petition along with those of the nominating
committee are posted in a conspicuous place in each credit union office
at least 35 days prior to the annual meeting.
Section 2. All elections shall be determined by plurality vote. The
election will be conducted by ballot boxes or voting machines, subject
to the following conditions:
(a) The election tellers will be appointed by the board of
directors;
(b) If sufficient nominations are made by the nominating committee
or by petition to provide more than one nominee for any position to be
filled, the secretary, at least 10 days prior to the annual meeting,
will cause ballot boxes and printed ballots, or voting machines, to be
placed in conspicuous locations, as determined by the board of
directors with the names of the candidates posted near the boxes or
voting machines. The name of each candidate will be followed by a brief
statement of qualifications and biographical data in a form approved by
the board of directors;
(c) After the members have been given 24 hours to vote at
conspicuous locations as determined by the board of directors, the
ballot boxes or voting machines will be opened, the vote tallied by the
tellers, the tallies placed in the ballot boxes, and the ballot boxes
resealed. The tellers are responsible at all times for the ballot boxes
or voting machines and the integrity of the vote. A record must be kept
of all persons voting and the tellers must assure themselves that each
person so voting is entitled to vote; and
(d) The ballot boxes will be taken to the annual meeting by the
tellers. At the annual meeting, printed ballots will be distributed to
those in attendance who have not voted and their votes will be
deposited in the ballot boxes placed by the tellers, before the
beginning of the meeting, in conspicuous locations with the names of
the candidates posted near them. After such members have been given an
opportunity to vote at the annual meeting, balloting will be closed,
the ballot boxes opened, the vote tallied by the tellers and added to
the previous count, and the chair will announce the result of the vote.
Option A4--Election by electronic device (including but not limited
to telephone and electronic mail) or mail ballot; nominating committee
and nominations by petition
Section 1. At least 120 days prior to each annual meeting the chair
will appoint a nominating committee of not fewer than three members. It
is the duty of the nominating committee to nominate at least one member
for each vacancy, including any unexpired term vacancy, for which
elections are being held, and to determine that the members nominated
are agreeable to the placing of their names in nomination and will
accept office if elected. The nominating committee files its
nominations with the secretary of the credit union at least 90 days
prior to the annual meeting, and the secretary notifies in writing all
members eligible to vote at least 75 days prior to the annual meeting
that nominations for vacancies may also be made by petition signed by
1% of the members with a minimum of 20 and a maximum of 500.
The written notice must indicate that the election will not be
conducted by ballot and there will be no nominations from the floor
when there is only one nominee for each position to be filled. A brief
statement of qualifications and biographical data in a form approved by
the board of directors will be included for each nominee submitted by
the nominating committee with the written notice to all eligible
members. Each nominee by petition must submit a similar statement of
qualifications and biographical data with the petition. The written
notice must state the closing date for receiving nominations by
petition. In all cases, the period for receiving nominations by
petition must extend at least 30 days from the date of the petition
requirement and the list of nominating committee's nominees are mailed
to all members. To be effective, such nominations must be accompanied
by a signed certificate from the nominee or nominees stating that they
are agreeable to nomination and will serve if elected to office. Such
nominations must be filed with the secretary of the credit union at
least 40 days prior to the annual meeting and the secretary will ensure
that nominations by petition along with those of the nominating
committee are posted in a conspicuous
[[Page 192]]
place in each credit union office at least 35 days prior to the annual
meeting.
Section 2. All elections will be by electronic device or mail
ballot, subject to the following conditions:
(a) The election tellers will be appointed by the board of
directors;
(b) If sufficient nominations are made by the nominating committee
or by petition to provide more than one nominee for any position to be
filled, the secretary, at least 30 days prior to the annual meeting,
will cause either a printed ballot or notice of ballot to be mailed to
all members eligible to vote;
(c) If the credit union is conducting its elections electronically,
the secretary will cause the following materials to be mailed to each
eligible voter:
(1) One notice of balloting stating the names of the candidates for
the board of directors and the candidates for other separately
identified offices or committees. The name of each candidate must be
followed by a brief statement of qualifications and biographical data
in a form approved by the board of directors.
(2) One instruction sheet stating specific instructions for the
electronic election procedure, including how to access and use the
system, and the period of time in which votes will be taken. The
instruction will state that members without the requisite electronic
device necessary to vote on the system may vote by mail ballot upon
written or telephone request and specify the date the request must be
received by the credit union.
(3) It is the duty of the tellers of election to verify, or cause
to be verified the name of the voter and the credit union account
number as they are registered in the electronic balloting system. It is
the duty of the teller to test the integrity of the balloting system at
regular intervals during the election period.
(4) Ballots must be received no later than midnight 5 calendar days
prior to the annual meeting.
(5) Voting will be closed at the midnight deadline specified in
subsection (4) hereof and the vote will be tallied by the tellers. The
result must be verified at the annual meeting and the chair will make
the result of the vote public at the annual meeting.
(6) In the event of malfunction of the electronic balloting system,
the board of directors may in its discretion order elections be held by
mail ballot only. Such mail ballots must conform to section 2(d) of
this Article and must be mailed to all eligible members 30 days prior
to the annual meeting. The board may make reasonable adjustments to the
voting time frames above, or postpone the annual meeting when
necessary, to complete the elections prior to the annual meeting.
(d) If the credit union is conducting its election by mail ballot,
the secretary will cause the following materials to be mailed to each
candidate:
(1) One ballot, clearly identified as such, on which the names of
the candidates for the board of directors and the candidates for other
separately identified offices or committees are printed in order as
determined by the draw of lots. The name of each candidate will be
followed by a brief statement of qualifications and biographical data
in a form approved by the board of directors;
(2) One ballot envelope clearly marked with instructions that the
completed ballot must be placed in that envelope and sealed;
(3) One identification form to be completed so as to include the
name, address, signature and credit union account number of the voter;
(4) One mailing envelope in which the voter, pursuant to
instructions provided with the mailing envelope, must insert the sealed
ballot envelope and the identification form, and which must have
postage prepaid and be preaddressed for return to the tellers;
(5) When properly designed, one form can be printed that represents
a combined ballot/identification form, and postage prepaid and
preaddressed return envelope;
(6) It is the duty of the tellers to verify, or cause to be
verified, the name of the voter and his credit union account number as
appearing on the identification form; to place the verified
identification form and the sealed ballot envelope in separate places
of safekeeping pending the count of the vote; in the case of a
questionable or challenged identification form, to retain the
identification form and sealed ballot envelope together until the
verification or challenge has been resolved;
(7) Ballots mailed to the tellers must be received by the tellers
no later than midnight 5 days prior to the date of the annual meeting;
(8) Voting will be closed at the midnight deadline specified in
subsection (7) hereof and the vote will be tallied by the tellers. The
result will be verified at the annual meeting and the chair will make
the result of the vote public at the annual meeting.
Section 3. Nominations shall be in the following order:
(a) Nominations for directors.
(b) Nominations for credit committee members, if applicable.
Elections may be by separate ballots following the same order as the
above nominations or, if preferred, may be by one ballot for all
offices.
Section 4. Members cannot vote by proxy, but a member other than a
natural person may vote through an agent designated in writing for the
purpose. A trustee, or other person acting in a representative
capacity, is not, as such, entitled to vote.
Section 5. Irrespective of the number of shares, no member has more
than one vote.
Section 6. The names and addresses of members of the board, board
officers, executive committee, and members of the credit committee, if
applicable and supervisory committees must be forwarded to the
Administration in accordance with the Act and regulations in the manner
as may be required by the Administration.
Section 7. The board may establish by resolution a minimum age, not
greater than 18 years of age, as a qualification for eligibility to
vote at meetings of the members, or to hold elective or appointive
office, or both.
The Credit Union may select the absentee ballot provision in
conjunction with the voting procedure it has selected. This may be done
by printing the credit union's bylaws with this provision or by
retaining this copy and checking the box.
{time} Section 8. The board of directors may authorize the use of
absentee ballots in conjunction with the other procedures authorized in
this article, subject to the following conditions:
(a) The election tellers will be appointed by the board of
directors;
(b) If sufficient nominations are made by the nominating committee
or by petition to provide more than one nominee for any position to be
filled, the secretary, at least 30 days prior to the annual meeting,
will cause printed ballots to be mailed to all members of the credit
union who are eligible to vote and who have submitted a written request
for an absentee ballot;
(c) The secretary will cause the following materials to be mailed
to each such eligible voter who has submitted a written request for an
absentee ballot:
(1) One ballot, clearly identified as such, on which the names of
the candidates for the board of directors and the candidates for other
separately identified offices or committees are printed in order as
determined by the draw of the lots. The name of each candidate will be
followed by a brief statement of qualifications and biographical data
in a form approved by the board of directors;
(2) One ballot envelope clearly marked with instructions that the
[[Page 193]]
completed ballot must be placed in that envelope and sealed;
(3) One identification form to be completed so as to include the
name, address, signature and credit union account number of the voter;
(4) One mailing envelope in which the voter, pursuant to
instructions provided with the envelope, must insert the sealed ballot
envelope and the identification form, and which must have postage
prepaid and be preaddressed for return to the tellers;
(5) When properly designed, one form can be printed that represents
a combined ballot/identification form, and postage prepaid and
preaddressed return envelope;
(d) It shall be the duty of the tellers of election to verify, or
cause to be verified, the name of the voter and his credit union
account number as appearing on the identification form; to retain in a
safe place the verified identification form and to place the sealed
ballot envelope in the ballot box in the credit union office; in the
case of a questionable or challenged identification form, to retain the
identification form and the sealed ballot envelope together until the
verification or challenge has been resolved; and in the event that more
than one voting procedure is used, to verify that no eligible voter has
voted more than one time;
(e) Ballots mailed to the tellers pursuant to subsection (b)
hereof, must be received by the tellers no later than midnight 5 days
prior to the date of the annual meeting; and
(f) After the expiration of the period of time specified in
subsection (e) hereof, the voting by absentee ballot will be closed and
absentee ballots deposited in the ballot boxes to be taken to the
annual meeting or included in a precount in accordance with procedures
specified in Article V, Section 2.
Article VI. Board of Directors
Section 1. The board consists of ____ members, all of whom must be
members of this credit union. The number of directors may be changed to
an odd number not fewer than 5 nor more than 15 by resolution of the
board. No reduction in the number of directors may be made unless
corresponding vacancies exist as a result of deaths, resignations,
expiration of terms of office, or other actions provided by these
bylaws. A copy of the resolution of the board covering any increase or
decrease in the number of directors must be filed with the official
copy of the bylaws of this credit union.
Section 2. ____ (No, one or two) directors or committee members may
be a paid employee of the credit union. ____ (No, one or two) immediate
family members of a director or committee member may be a paid employee
of the credit union. In no case may employees and family members
constitute a majority of the board. The board may appoint a management
official who ____ (may or may not) be a member of the board and one or
more assistant management officials who ____ (may or may not) be a
member of the board. If the management official or assistant management
official is permitted to serve on the board, he or she may not serve as
the chair.
Section 3. Regular terms of office for directors must be for
periods of either 2 or 3 years as the board determines: Provided,
however, that all regular terms must be for the same number of years
and until the election and qualification of successors. The regular
terms must be fixed at the beginning, or upon any increase or decrease
in the number of directors, that approximately an equal number of
regular terms must expire at each annual meeting.
Section 4. Any vacancy on the board, credit committee (if
applicable), or supervisory committee will be filled within a
reasonable time by vote of a majority of the directors then holding
office. Directors and credit committee members (if applicable) so
appointed will hold office only until the next annual meeting, at which
any unexpired terms will be filled by vote of the members, and until
the qualification of their successors. Members of the supervisory
committee so appointed will hold office until the first regular meeting
of the board following the next annual meeting of members at which the
regular term expires and until the appointment and qualification of
their successors.
Section 5. A regular meeting of the board must be held each month
at the time and place fixed by resolution of the board. One regular
meeting each calendar quarter must be conducted in person. The other
regular meetings may be conducted using audio or video teleconference
methods. The chair, or in his absence the ranking vice chair, may call
a special meeting of the board at any time; and must do so upon written
request of a majority of the directors then holding office. Unless the
board prescribes otherwise, the chair, or in his absence the ranking
vice chair, will fix the time and place of special meetings. Notice of
all meetings will be given in such manner as the board may from time to
time by resolution prescribe. Special meetings may be conducted using
audio or video teleconference methods.
Section 6. The board has the general direction and control of the
affairs of this credit union and is responsible for performing all the
duties customarily performed by boards of directors. This includes but
is not limited to the following:
(a) Directing the affairs of the credit union in accordance with
the Act, these bylaws, the rules and regulations and sound business
practices.
(b) Establishing programs to achieve the purposes of this credit
union as stated in article 1, section 2, of these bylaws.
(c) Establishing a loan collection program and authorizing the
chargeoff of uncollectible loans.
(d) Determining that all persons appointed or elected by this
credit union to any position requiring the receipt, payment or custody
of money or other property of this credit union, or in its custody or
control as collateral or otherwise, are properly bonded in accordance
with the Act and regulations.
(e) Performing additional acts and exercising additional powers as
may be required or authorized by applicable law.
If the credit union has an elected credit committee, you do not
need to check a box. If the credit union has no credit committee check
Option 1 and if it has an appointed credit committee check Option 2.
{time} Option 1 No Credit Committee.
(f) Reviewing denied loan applications of members who file written
requests for such review.
(g) Appointing one or more loan officers and delegating to those
officers the power to approve or disapprove loans, lines of credit or
advances from lines of credit.
(h) In its discretion, appointing a loan review committee to review
loan denials and delegating to the committee the power to overturn
denials of loan applications. The committee will function as a mid-
level appeal committee for the board. Any denial of a loan by the
committee must be reviewed by the board upon written request of the
member. The committee must consist of three members and the regular
term of office of the committee member will be for two years. Not more
than one member of the committee may be appointed as a loan officer.
{time} Option 2 Appointed Credit Committee.
(f) Appointing an odd number of credit committee members as
provided in Article VIII of these bylaws.
[[Page 194]]
Section 7. A majority of the number of directors, including any
vacant positions, constitutes a quorum for the transaction of business
at any meeting thereof; but fewer than a quorum may adjourn from time
to time until a quorum is in attendance.
Section 8. If a director or a credit committee member, if
applicable, fails to attend regular meetings of the board or credit
committee, respectively, for 3 consecutive months, or 4 meetings within
a calendar year, or otherwise fails to perform any of the duties
devolving upon him as a director or a credit committee member, the
office may be declared vacant by the board and the vacancy filled as
herein provided. The board may remove any board officer from office for
failure to perform the duties thereof, after giving the officer
reasonable notice and opportunity to be heard.
When any board officer, membership officer, executive committee
member or investment committee member is absent, disqualified, or
otherwise unable to perform the duties of the office, the board may by
resolution designate another member of this credit union to act
temporarily in his place. The board may also, by resolution, designate
another member or members of this credit union to act on the credit
committee when necessary in order to obtain a quorum.
Section 9. Any member of the supervisory committee may be suspended
by a majority vote of the board of directors. The members of this
credit union will decide, at a special meeting held not fewer than 7
nor more than 14 days after any such suspension, whether the suspended
committee member will be removed from or restored to the supervisory
committee.
Article VII. Board Officers, Management Officials and Executive
Committee
Section 1. The board officers of this credit union are comprised of
a chair, one or more vice chairs, a financial officer, and a secretary,
all of whom are elected by the board and from their number. The board
determines the title and rank of each board officer and records them in
the addendum to this article. One board officer, the ________, may be
compensated for services as determined by the board. If more than one
vice chair is elected, the board determines their rank as first vice
chair, second vice chair, and so on. The offices of the financial
officer and secretary may be held by the same person. Unless removed as
provided in these bylaws, the board officers elected at the first
meeting of the board hold office until the first meeting of the board
following the first annual meeting of the members and until the
election and qualification of their respective successors.
Section 2. Board officers elected at the meeting of the board next
following the annual meeting of the members, which must be held not
later than 7 days after the annual meeting, hold office for a term of 1
year and until the election and qualification of their respective
successors: Provided, however, That any person elected to fill a
vacancy caused by the death, resignation, or removal of an officer is
elected by the board to serve only for the unexpired term of such
officer and until a successor is duly elected and qualified.
Section 3. The chair presides at all meetings of the members and at
all meetings of the board, unless disqualified through suspension by
the supervisory committee. The chair also performs such other duties as
customarily appertain to the office of the chair or as may be directed
to perform by resolution of the board not inconsistent with the Act and
regulations and these bylaws.
Section 4. The board must approve all individuals who are
authorized to sign all notes of this credit union and all checks,
drafts and other orders for disbursement of credit union funds.
Section 5. The ranking vice chair has and may exercise all the
powers, authority, and duties of the chair during the absence of the
latter or his inability to act.
Section 6. The financial officer manages this credit union under
the control and direction of the board unless the board has appointed a
management official to act as general manager. Subject to such
limitations, controls and delegations as may be imposed by the board,
the financial officer will:
(a) Have custody of all funds, securities, valuable papers and
other assets of this credit union.
(b) Provide and maintain full and complete records of all the
assets and liabilities of this credit union in accordance with forms
and procedures prescribed in the Accounting Manual for Federal Credit
Unions or otherwise approved by the Administration.
(c) Within 20 days after the close of each month, ensure that a
financial statement showing the condition of this credit union as of
the end of the month, including a summary of delinquent loans is
prepared and submitted to the board and post a copy of such statement
in a conspicuous place in the office of the credit union where it will
remain until replaced by the financial statement for the next
succeeding month.
(e) Ensure that such financial and other reports as the
Administration may require are prepared and sent.
(f) Within standards and limitations prescribed by the board,
employ tellers, clerks, bookkeepers, and other office employees, and
have the power to remove such employees.
(g) Perform such other duties as customarily appertain to the
office of the financial officer or as may be directed to perform by
resolution of the board not inconsistent with the Act, regulations and
these bylaws.
The board may employ one or more assistant financial officers, none
of whom may also hold office as chair or vice chair, and may authorize
them, under the direction of the financial officer, to perform any of
the duties devolving on the financial officer, including the signing of
checks. When designated by the board, any assistant financial officer
may also act as financial officer during the temporary absence of the
financial officer or in the event of his/her temporary inability to
act.
Section 7. The board may appoint a management official who is under
the direction and control of the board or of the financial officer as
determined by the board. The management official may be assigned any or
all of the responsibilities of the financial officer described in
section 6 of this article. The board will determine the title and rank
of each management official and record them in the addendum to this
article. The board may employ one or more assistant management
officials. The board may authorize assistant management officials under
the direction of the management official, to perform any of the duties
devolving on the management official, including the signing of checks.
When designated by the board, any assistant management official may
also act as management official during the temporary absence of the
management official or in the event of his temporary inability to act.
Section 8. The board employs, fixes the compensation, and
prescribes the duties of such employees as may in the discretion of the
board be necessary, and has the power to remove such employees, unless
it has delegated these powers to the financial officer or management
official. Neither the board, the financial officer, nor the management
official has the power or duty to employ, prescribe the duties of, or
remove necessary clerical and auditing assistance employed or utilized
by the supervisory committee and, if there is a credit committee, the
power or duty to employ, prescribe the duties
[[Page 195]]
of, or remove any loan officer appointed by the credit committee.
Section 9. The secretary prepares and maintains full and correct
records of all meetings of the members and of the board, which records
will be prepared within 7 days after the respective meetings. The
secretary must promptly inform the Administration in writing of any
change in the address of the office of this credit union or the
location of its principal records. The secretary will give or cause to
be given, in the manner prescribed in these bylaws, proper notice of
all meetings of the members, and perform such other duties as may be
directed to perform by resolution of the board not inconsistent with
the Act, regulations and these bylaws. The board may employ one or more
assistant secretaries, none of whom may also hold office as chair, vice
chair, or financial officer, and may authorize them under direction of
the secretary to perform any of the duties devolving on the secretary.
Section 10. The board may appoint an executive committee of not
fewer than three directors to serve at its pleasure, to act for it with
respect to specifically delegated functions authorized by the Act and
regulations. The board may also authorize such executive committee or a
membership officer(s) appointed by the board from the membership other
than a board member paid as an officer, the financial officer, any
assistant to the paid officer of the board or to the financial officer
or any loan officer, to serve at its pleasure to approve applications
for membership under such conditions as the board and these bylaws may
prescribe. No executive committee member or membership officer may be
compensated as such.
Section 11. The board may appoint an investment committee composed
of not less than two, to serve at its pleasure to have charge of making
investments under rules and procedures established by the board. No
member of the investment committee may be compensated as such.
Addendum: The board shall list the positions of the board officers
and management officials of this credit union. They are as follows:
Select Option 1 if the credit union has a credit committee and
Option 2 if it does not have a credit committee.
{time} Option 1 Article VIII. Credit Committee
Section 1. The credit committee consists of ____ members. All the
members of the credit committee must be members of this credit union.
The number of members of the credit committee must be an odd number and
may be changed to not fewer than 3 nor more than 7 by resolution of the
board. No reduction in the number of members may be made unless
corresponding vacancies exist as a result of deaths, resignations,
expiration of terms of office, or other actions provided by these
bylaws. A copy of the resolution of the board covering any increase or
decrease in the number of committee members must be filed with the
official copy of the bylaws of this credit union.
Section 2. Regular terms of office for elected credit committee
members are for periods of either 2 or 3 years as the board shall
determine: Provided, however, That all regular terms are for the same
number of years and until the election and qualification of successors.
The regular terms are fixed at the beginning, or upon any increase or
decrease in the number of committee members, that approximately an
equal number of regular terms expire at each annual meeting.
Regular terms of office for appointed credit committee members are
for periods as determined by the board and as noted in the board's
minutes.
Section 3. The credit committee chooses from their number a chair
and a secretary. The secretary of the committee prepares and maintains
full and correct records of all actions taken by it, and such records
must be prepared within 3 days after the action. The offices of the
chair and secretary may be held by the same person.
Section 4. The credit committee may, by majority vote of its
members, appoint one or more loan officers to serve at its pleasure,
and delegate to him/her or them the power to approve application for
loans or lines of credit, share withdrawals, releases and substitutions
of security, within limits specified by the committee and within limits
of applicable law and regulations. Not more than one member of the
committee may be appointed as a loan officer. Each loan officer must
furnish to the committee a record of each transaction approved or not
approved by him within 7 days of the date of the filing of the
application or request, and such record becomes a part of the records
of the committee. All applications or requests not approved by a loan
officer must be acted upon by the committee. No individual may disburse
funds of this credit union for any application or share withdrawal
which he has approved as a loan officer.
Section 5. The credit committee holds such meetings as the business
of this credit union may require, and not less frequently than once a
month. Notice of such meetings will be given to members of the
committee in such a manner as the committee may from time to time, by
resolution, prescribe.
Section 6. The credit committee or loan officer must inquire into
the character and financial condition of each applicant for a loan or
line of credit and his sureties, if any, to ascertain their ability to
repay fully and promptly the obligations incurred by them and to
determine whether the loan or line of credit will be of probable
benefit to the borrower. The credit committee and its appointed loan
officers will endeavor diligently to assist applicants in solving their
financial problems.
Section 7. No loan or line of credit may be made unless approved by
the committee or a loan officer in accordance with applicable law and
regulations.
Section 8. Subject to the limits imposed by applicable law and
regulations, these bylaws, and the general policies of the board, the
credit committee, or a loan officer, shall determine the security if
any required for each application and the terms of repayment. The
security furnished must be adequate in quality and character and
consistent with sound lending practices. When funds are not available
to make all the loans and lines of credit for which there are
applications, preference will be given, in all cases, to the smaller
applications if the need and credit factors are nearly equal.
Option 2 Article VIII. Loan Officers (No Credit Committee)
Section 1. Each loan officer must maintain a record of each
transaction approved or not approved by him/her within 7 days of the
filing of the application or request, and such records becomes a part
of the records of the credit union. No individual may disburse funds of
this credit union for any application or share withdrawal which he has
approved as a loan officer.
Section 2. The loan officer must inquire into the character and
financial condition of each applicant for a loan or line of credit and
his sureties, if any, to ascertain their ability to repay fully and
promptly the obligations incurred by them and to determine whether the
loan or line of credit will be of probable benefit to the borrower. The
loan officers will endeavor diligently to assist applicants in solving
their financial problems.
Section 3. No loan or line of credit may be made unless approved by
a loan officer in accordance with applicable law and regulations.
Section 4. Subject to the limits imposed by applicable law and
[[Page 196]]
regulations, these bylaws, and the general policies of the board, a
loan officer determines the security if any required for each
application and the terms of repayment. The security furnished must be
adequate in quality and character and consistent with sound lending
practices. When funds are not available to make all the loans and lines
of credit for which there are applications, preference will be given,
in all cases, to the smaller applications if the need and credit
factors are nearly equal.
Article IX. Supervisory Committee
Section 1. The supervisory committee is appointed by the board from
among the members of this credit union, one of whom may be a director
other than the financial officer. The board determines the number of
members on the committee, which may not be fewer than 3 nor more than
the maximum number permitted by the Act. No member of the credit
committee, if applicable, or any employee of this credit union may be
appointed to the committee. Regular terms of committee members are for
periods of 1, 2, or 3 years as the board determines: Provided, however,
That all regular terms are for the same number of years and until the
appointment and qualification of successors. The regular terms are
fixed at the beginning, or upon any increase or decrease in the number
of committee members, so that approximately an equal number of regular
terms expires at each annual meeting.
Section 2. The supervisory committee members choose from among
their number a chair and a secretary. The secretary of the supervisory
committee prepares, maintains, and has custody of full and correct
records of all actions taken by it. The offices of chair and secretary
may be held by the same person.
Section 3. The supervisory committee makes, or causes to be made,
such audits, and prepares and submits such written reports, as are
required by the Act and regulations. The committee may employ and use
such clerical and auditing assistance as may be required to carry out
its responsibilities prescribed by this article, and may request the
board to provide compensation for such assistance. It will prepare and
forward to the Administration such reports as may be required.
Section 4. The supervisory committee must verify the accounts of
all members with the records of the financial officer from time to time
and not less frequently than as required by the Act and regulations.
The committee must maintain a record of such verification.
Section 5. By unanimous vote, the supervisory committee may suspend
until the next meeting of the members any director, board officer, or
member of the credit committee. In the event of any such suspension,
the supervisory committee must call a special meeting of the members to
act on the suspension, which meeting must be held not fewer than 7 nor
more than 14 days after the suspension. The chair of the committee acts
as chair of the meeting unless the members select another person to act
as chair.
Section 6. By the affirmative vote of a majority of its members,
the supervisory committee may call a special meeting of the members to
consider any violation of the provisions of the Act, the regulations,
or of the charter or the bylaws of this credit union, or to consider
any practice of this credit union which the committee deems to be
unsafe or unauthorized.
Article X. Organization Meeting
Section 1. At the time application is made for a federal credit
union charter, the subscribers to the organization certificate must
meet for the purpose of electing a board of directors and a credit
committee, if applicable. Failure to commence operations within 60 days
following receipt of the approved organization certificate is cause for
revocation of the charter unless a request for an extension of time has
been submitted to and approved by the Regional Director.
Section 2. The subcribers elect a chair and a secretary for the
meeting. The subscribers then elect from their number, or from those
eligible to become members of this credit union, a board of directors
and a credit committee, if applicable, all to hold office until the
first annual meeting of the members and until the election and
qualification of their respective successors. If not already a member,
every person elected under this section or appointed under section 3 of
this article, must qualify within 30 days by becoming a member. If any
person elected as a director or committee member or appointed as a
supervisory committee member does not qualify as a member within 30
days of such an election or appointment, his office will automatically
become vacant and be filled by the board.
Section 3. Promptly following the elections held under the
provisions of section 2 of this article, the board must meet and elect
the board officers who will hold office until the first meeting of the
board of directors following the first annual meeting of the members
and until the election and qualification of their respective
successors. The board also appoints a supervisory committee at this
meeting as provided in article IX, section 1, of these bylaws and a
credit committee, if applicable. The members so appointed hold office
until the first regular meeting of the board following the first annual
meeting of the members and until the appointment and qualification of
their respective successors.
Article XI. Loans and Lines of Credit to Members
Section 1. Loans to individuals may only be made to members and for
provident or productive purposes in accordance with applicable law and
regulations. Loans to a member other than a natural person may not
exceed its shareholdings in this credit union, unless the loan is made
jointly to one or more natural person members and a business
organization in which they have a majority interest, or if the
nonnatural person is an association, the loan is made jointly to a
majority of the members of the association and to the association in
its own right.
Section 2. All loans made by the credit union must follow
applicable law and regulations.
Section 3. Any member whose loan is delinquent may be required to
pay a late charge as determined by the board of directors.
Article XII. Dividends
Section 1. The board establishes dividend periods and declares
dividends as permitted by the Act and applicable regulations.
Article XIII. Deposit of Funds
Section 1. All funds of this credit union, except for petty cash
and cash change funds, must be deposited in such qualified depository
or depositories from among those authorized by applicable law and
regulations as the board may from time to time by resolution designate;
and must be so deposited not later than the ____ (fill in number)
banking day after their receipt: Provided, however, That receipts in
the aggregate of $____ (fill in number) or less may be held as long as
1 week before they are deposited.
Article XIV. Expulsion and Withdrawal
Section 1. A member may be expelled only in the manner provided by
the Act. Expulsion or withdrawal will not operate to relieve a member
of any liability to this credit union. All amounts paid in on shares by
expelled or withdrawing members, prior to their
[[Page 197]]
expulsion or withdrawal, will be paid to them in the order of their
withdrawal or expulsion, but only as funds become available and only
after deducting any amounts due to this credit union.
Article XV. Minors
Section 1. Shares may be issued in the name of a minor.
Article XVI. Definitions
Section 1. When used in these bylaws the terms:
(a) ``Act'' means the Federal Credit Union Act, as amended.
(b) ``Administration'' means the National Credit Union
Administration.
(c) ``Board'' means board of directors of the federal credit union.
(d) ``NCUA Board'' means the Board of the National Credit Union
Administration.
(e) ``Regulation'' or ``regulations'' means rules and regulations
issued by the NCUA Board.
(f) ``Applicable law and regulations'' means the Federal Credit
Union Act and rules and regulations issued thereunder or other
applicable federal statutes and rules and regulations issued thereunder
as the context indicates (such as The Higher Education Act of 1965).
(g) ``Paid in and unimpaired capital,'' as of a given date, means
the balance of the paid-in share accounts as of such date, less any
losses that may have been incurred for which there is no reserve or
which have not been charged against undivided earnings.
(h) ``Surplus,'' as of a given date, means the credit balance of
the undivided earnings account on such date, after all losses have been
provided for and net earnings or net losses have been added thereto or
deducted therefrom, as the case may be. Reserves are not considered as
a part of the surplus.
(i) ``Share'' or ``shares'' means all classes of shares and share
certificates that may be held in accordance with applicable law and
regulations.
Section 2. If included in the definition of the field of membership
in the organization certificate charter of this credit union, the term
or expression ``Organizations of such persons'' means an organization
or organizations composed exclusively of persons who are within the
field of membership of this credit union.
Article XVII. General
Section 1. All power, authority, duties, and functions of the
members, directors, officers, and employees of this credit union,
pursuant to the provisions of these bylaws, must be exercised in strict
conformity with the provisions of applicable law and regulations, and
of the charter and the bylaws of this credit union.
Section 2. The officers, directors, members of committees and
employees of this credit union must hold in confidence all transactions
of this credit union with its members and all information respecting
their personal affairs, except to the extent deemed necessary by the
board in connection with:
(a) The making of loans and extending lines of credit.
(b) The collection of loans.
(c) The guarantee of member share drafts by third parties.
In accordance with the above, the board of directors may authorize
participation in:
(a) A credit reporting agency if it has determined that use of such
an agency is essential in the making of loans and extending lines of
credit and that information supplied by the credit union concerning its
members will be made available only to legitimate members belonging to
that agency and persons who have a legitimate business need for
information in connection with a business transaction involving a
consumer.
(b) A consumer reporting agency if it has determined that
information supplied by the credit union is essential to the guarantee
of member share drafts by that agency.
Section 3. Notwithstanding any other provisions in these bylaws,
any director, committee member or officer of this credit union may be
removed from office by the affirmative vote of a majority of the
members present at a special meeting called for the purpose, but only
after an opportunity has been given to be heard.
Section 4. No director, committee member, officer, agent, or
employee of this credit union may participate in any manner, directly
or indirectly, in the deliberation upon or the determination of any
question affecting his pecuniary or personal interest or the pecuniary
interest of any corporation, partnership, or association (other than
this credit union) in which he or she is directly or indirectly
interested. In the event of the disqualification of any director
respecting any matter presented to the board for deliberation or
determination, such director must withdraw from such deliberation or
determination; and in such event the remaining qualified directors
present at the meeting, if constituting a quorum with the disqualified
director or directors, may exercise with respect to this matter, by
majority vote, all the powers of the board. In the event of the
disqualification of any member of the credit committee, if applicable
or the supervisory committee, such committee member must withdraw from
such deliberation or determination.
Section 5. Copies of the organization certificate of this credit
union, its bylaws and any amendments thereof, and any special
authorizations by the Administration must be preserved in a place of
safekeeping. Returns of nominations and elections and proceedings of
all regular and special meetings of the members and directors must be
recorded in the minute books of this credit union. The minutes of the
meetings of the members, the board, and the committees must be signed
by their respective chairmen or presiding officers and by the persons
who serve as secretaries of such meetings.
Section 6. All books of account and other records of this credit
union must be available at all times to the directors and committee
members of this credit union. The charter and bylaws of this credit
union must be made available for inspection by any member and, if the
member requests a copy, it will be provided for a reasonable fee.
Section 7. Each member must keep the credit union informed about
his current address.
Section 8. (a) The credit union may elect to indemnify to the
extent authorized by (check one)
[ ] law of the state of ____:
[ ] Model Business Corporation Act:
the following individuals from any liability asserted against them and
expenses reasonably incurred by them in connection with judicial or
administrative proceedings to which they are or may become parties by
reason of the performance of their official duties (check as
appropriate).
[ ] current officials
[ ] former officials
[ ] current employees
[ ] former employees
(b) The credit union may purchase and maintain insurance on behalf
of the individuals indicated in (a) above against any liability
asserted against them and expenses reasonably incurred by them in their
official capacities and arising out of the performance of their
official duties to the extent such insurance is permitted by the
applicable state law or the Model Business Corporation Act.
(c) The term ``official'' in this bylaw means a person who is a
member of the board of directors, credit committee, supervisory
committee, other volunteer committee (including elected or appointed
loan officers or membership
[[Page 198]]
officers), established by the board of directors.
Article XVIII. Amendments of Bylaws and Charter
Section 1. Amendments of these bylaws may be adopted and amendments
of the charter requested by the affirmative vote of two-thirds of the
authorized number of members of the board at any duly held meeting
thereof if the members of the board have been given prior written
notice of said meeting and the notice has contained a copy of the
proposed amendment or amendments. No amendment of these bylaws or of
the charter shall become effective, however, until approved in writing
by the NCUA Board.
[FR Doc. 98-33947 Filed 12-31-98; 8:45 am]
BILLING CODE 7535-01-U
