[Federal Register Volume 64, Number 198 (Thursday, October 14, 1999)]
[Notices]
[Pages 55760-55773]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-26716]
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NATIONAL CREDIT UNION ADMINISTRATION
Federal Credit Union Bylaws
AGENCY: National Credit Union Administration (NCUA).
ACTION: Notice of Federal Credit Union Bylaws.
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SUMMARY: This notice advises the public of the final changes to the
federal credit union (FCU) bylaws. The changes consolidate the two
manuals which currently contain the 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several of the bylaws had become outdated or obsolete.
DATES: The Federal Credit Union Bylaws are effective October 14, 1999.
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
On December 17, 1998, the NCUA Board issued a Notice and Request
for Comment on proposed Federal Credit Union (FCU) Bylaws. 64 FR 187
(January 4, 1999). The proposed bylaws were drafted after reviewing
comments in response to a Request for Comment. 62 FR 11778 (March 13,
1997). Those commenters supported the bylaws being published as a
manual rather than a regulation, consolidating the bylaws into one
publication, deleting outdated and obsolete bylaws, and not requiring
FCUs to adopt the revised bylaws.
The proposal was drafted in accordance with those comments. As a
result, the proposed bylaws 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are outdated are deleted; and provisions that are operational or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.
Summary of Comments
The Board received 24 comments in response to its proposal. The
seven commenters that specifically comment on the revised format of
consolidating the bylaws in one publication applaud the Board's effort
to make the bylaws more user friendly. Several commenters also comment
favorably on the Board's decision to remove operational issues from the
bylaws. Some of those commenters suggest other areas that could be
removed because they are operational. These are discussed below.
Overall the comments were favorable.
Article by Article Analysis of Comments
Article I, Name--Purposes
Section 2. This provision states the purpose of the credit union is
``to
[[Page 55761]]
promote thrift among its members * * * and to create for them a source
of credit for provident or productive purposes.'' One commenter
suggests changing it to ``provident, productive or business purposes''
because the member business loan rule exempts from its limitations
credit unions that are chartered for the purpose of making business
loans.
The Board agrees that, if an FCU determines that in compliance with
the Federal Credit Union Act (the Act) one of its purposes is to make
member business loans, it should be permitted to add this language to
its bylaws. 12 U.S.C. 1757a(b)(1). This provision is optional. The
final bylaws indicate that FCUs wishing to include the ``business
purposes'' language in their bylaws may do so.
Article II, Qualifications for Membership
Sections 2 and 3. These provisions discuss application for
membership and withdrawal from membership. Four commenters state that
these provisions are operational and should be deleted. One commenter
objects to the withdrawal from membership provision on the basis that
it is inconsistent with the Federal Credit Union Act which states two
grounds for expulsion. 12 U.S.C. 1764(a) and (b). The commenter fails
to distinguish between withdrawal and expulsion. One commenter wants
the provision expanded to include the criteria for membership in the
Chartering Manual.
Although operational, the Board believes that including these
provisions in the bylaws offers useful guidance to FCUs and their
members without placing any additional burdens on them.
Section 5. This provision was deleted because the ``once a member
always a member'' policy is now addressed in the Act. 12 U.S.C.
1759(e)(2). Two commenters suggest that the bylaw be retained with
language allowing FCUs to restrict services to members no longer within
the field of membership.
The Board agrees that the bylaws are an appropriate place for this
provision to be included. The bylaw will repeat the statutory language
and note that FCUs that want to restrict services should state the
restrictions in this bylaw provision. This provision is now Article II,
Section 4.
Article III, Shares of Members
Sections 1 and 3. One commenter likes the proposal's approach of
allowing the FCU to fill in the par value amount of a share and the
time frame to complete payment of one share.
Section 2. One commenter suggests that the requirement that 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'' should say
``may'' instead of ``shall.'' The commenter notes that large FCUs have
no need for the limitation. The Act requires the board to set the
maximum amount and so, this provision must remain. 12 U.S.C. 1761b(7).
One commenter suggests that the requirement that both owners of a
joint account each purchase a share if they both want to be a member
should be stated in the bylaw. The Board agrees that the bylaws are the
appropriate place to clarify that for joint account holders to both be
members, the account must have at least two shares in it. This
provision is added as Section 7 of this Article.
Section 4. This section permits transfer from one member to another
by ``a written instrument'' and requires the transfer to ``carry
dividend credits with it.'' Five commenters state that this provision
is confusing because membership shares generally can't be transferred.
The intent of this provision is to show that a member can only transfer
shares to members and that the shares function like stock in a
corporation.
Some commenters note that the requirement that it be written is
outdated. The Board agrees and is deleting the ``written'' requirement.
Section 5. This section sets forth the requirements for withdrawing
shares from a member's account. Three commenters note that several of
these provisions are operational and should be deleted. One of the
commenters notes that, although section 5(d) allowing deceased members'
accounts to remain open for a period of four years is operational, it
should remain because there is no other authority for it. The Board
agrees that all of the Section 5 provisions are operational but they
provide useful guidance to the FCU and notice to the member and so, the
Board will retain them.
Two commenters suggest that the bylaws include a provision for
statutory liens because NCUA's proposed rule on statutory liens
references a bylaw as authority for a statutory lien. 63 FR 57943
(October 29, 1998). The bylaws do contain a provision for statutory
liens. It is proposed section 5(c) which is currently Article III,
Section 5(d) of the FCU Bylaws.
Four commenters object to deleting Section 5(f). This provision
allows boards to impose fees for excessive share withdrawals.
Commenters note that although the Truth in Savings Act (TISA) requires
FCUs to disclose fees it does not authorize fees. The Board agrees and
will reinstate this provision in the final bylaws as Section 5(e).
Article IV, Meetings of Members
Section 1. This section requires the annual meeting to be held
within 100 miles of the office of the credit union. Four commenters
suggest adding ``any'' before office to allow FCUs greater flexibility.
The Board agrees that since the intent is to allow FCUs the maximum
flexibility possible that ``any'' should be placed before office. One
commenter suggests that the requirement of an annual meeting be
eliminated. This requirement is statutory and cannot be eliminated. 12
U.S.C. 1760.
Section 2. This section states the time frames for notice of annual
and special meetings. Under the current bylaws, notice of the annual
meeting must be given at least 7 days prior to the annual meeting. The
proposal changes the time to at least 30 days but not more than 75
days. Five commenters object to the change. The reasons cited were that
there is more flexibility with 7 days and the new time frame may
require an additional mailing which would be costly because, in the
past, the notice was sent with the quarterly statement. The Board
believes that the requirement of at least 30 days notice to the member
is not an undue hardship on an FCU and that the notice can still be
mailed with the quarterly statement. However, 7 days notice could be an
undue hardship on the membership and does not facilitate maximum member
participation at the annual meeting. The notice requirements for a
special meeting are still only 7 days because there is often a need to
act promptly when scheduling a special meeting. However, that same need
is not generally associated with the scheduling of the annual meeting.
Section 3. This section states the number of members necessary to
request a special meeting. The current bylaws require 25 members or 5%,
whichever is greater, not to exceed 200. The proposal only changes the
not-to-exceed number from 200 to 500. Three commenters object to the
change. It is unclear whether the commenters understood the change
since one said a percentage is fairer and two said small credit unions
are penalized. All three commenters ignored the fact that the 5% limit
still exists. The Board is going to keep the 500 maximum. The intent of
the increase is to prevent a small number of members in a very large
credit union from requesting a special meeting every time they don't
agree with management. The increase has no effect on a small credit
union.
[[Page 55762]]
Section 4. This section sets forth the order of business at the
annual meeting. Two commenters suggest moving the elections to after
the report by the supervisory committee and one commenter suggests
deleting this provision because it is operational. The Board agrees
that this provision is operational, but rather than delete the
provision, the order of business will no longer be required, but rather
suggested, with the requirement that, whatever order of business an FCU
chooses, it must comply with ``Robert's Rules of Order.''
One commenter suggests that proxy voting be allowed. This is
prohibited by the Act. 12 U.S.C. 1760.
Article V, Elections
The proposal lists four election options: (1) In person elections
with nominating committee and nominations from floor; (2) In person
elections with nominating committee and nominations by petition; (3)
Ballot boxes or voting machines with nominating committee and
nominations by petition; and (4) Electronic device or mail ballot with
nominating committee and nominations by petition. One commenter
suggests a fifth option that would allow an individual to place himself
on the ballot in lieu of nominations from the floor or nomination by
petition. The Board rejects this suggestion because it is contrary to
standard business practice. One commenter likes the four options and
the guidance they offer.
Two commenters suggest nominations from the floor be deleted
because they're archaic and one of those commenters also suggests that
nominations by petition be deleted. The Board recognizes that very few
FCUs still have nominations from the floor but sees no reason to
preclude FCUs from conducting their elections in that manner if they
choose to.
One commenter opposes FCUs checking a box to select their voting
method. The commenter is concerned that an FCU may forget to check a
box or check too many boxes. The commenter suggests that all FCUs
reprint the bylaws with only the method selected printed. The Board
believes that FCUs will take the responsibility of selecting their
bylaws seriously and will follow the appropriate instructions.
Therefore, FCUs have the option of adopting their bylaws by checking
the appropriate boxes or reprinting the bylaws with only the provisions
that apply to them.
Two commenters note that the revised bylaws allow a combined ballot
and identification form but require the ballot and identification form
to be kept in separate places. The commenters are correct that these
provisions are inconsistent and so, the requirement that the ballot and
identification form be kept in separate places has been deleted.
One commenter objects to the requirement for prepaid postage with
the mail and absentee ballots. The Board has required this in the past
and will continue to require it. The rationale behind the requirement
is to elicit as large of a response as possible. In addition, depending
on the type of postage, an FCU is often not required to pay if the
prepaid envelope is not returned.
One commenter objects to the requirement that electronic ballots be
received 5 calendar days prior to the meeting because other ballots are
not handled in the same manner. The commenter is wrong. Mail and
absentee ballots have the same requirements. This enables the FCU to
tally the votes prior to the annual meeting when the results are
announced.
Section 3. Two commenters suggest deleting the order of nominations
because they are operational. The Board agrees, but rather than delete
the order because it provides guidance to some FCUs, it has replaced
``shall'' with ``may.''
Two commenters suggest adding to the nominating committee's
responsibilities the duty to determine that the nominees meet the
criteria for the position. The Board does not agree that this
requirement should be part of the FCU Bylaws but rather, the board of
directors in its discretion could make that a responsibility of the
nominating committee.
Article VI, Board of Directors
Section 2. The proposal allows an FCU to limit the number of
directors and their immediate family members that can be paid employees
of the FCU to 0, 1 or 2. The current bylaws place no limits and the
standard amendments allow an FCU to select any number. Two commenters
object to the two limitation. They suggest the number be left to the
discretion of the FCU. Two other commenters suggest NCUA prohibit any
director or their immediate family member from being a paid employee.
Although the Board would prefer to see an FCU limit the number of
directors and immediate family members that can be paid employees of
the FCU, the Board agrees with the commenters that the ultimate
decision should be made by the board of directors. The final bylaws
allow the FCU to select the number of paid employees that may serve on
the board or are relatives of board members but retain the limitation
in the proposal that it is not a majority of the board.
Section 4. This provision directs the board to fill any vacancies
on the board, credit committee or supervisory committee ``within a
reasonable time.'' Four commenters object to ``within a reasonable
time.'' Some suggestions were to define ``reasonable time,'' put a time
certain in the bylaw or leave it to the board's discretion.
The final bylaw will maintain the ``within a reasonable time
requirement.'' This provision allows the board the flexibility to deal
with different situations and determine what is reasonable under the
circumstances.
Section 5. This section requires one face-to-face board meeting a
quarter. Six commenters object to this requirement and two commenters
noted their approval. The objectors state that NCUA should allow the
board to determine how it wishes to conduct its meetings. The Board
agrees that NCUA should not dictate how a board conducts its meetings.
However, the Board does believe that it is important for a board to
have personal interaction at least once a year, and so, will require
one face-to-face meeting a year. The only requirement for the annual
face-to-face meeting is that a quorum be physically present. Board
members not necessary to obtain a quorum, who wish to participate, may
do so by one of the other approved methods.
Two commenters suggest that the bylaws allow telephone and notation
voting. The revised bylaws allow audio teleconference meetings which is
the same as telephone voting.
Section 6(c). One commenter suggests that this provision be
clarified to state that the board is required to charge off
uncollectible loans. The Board believes this bylaw is self explanatory
and does not need further clarification.
Section 8. This section addresses removal of directors and credit
committee members for missing 3 consecutive meetings or 4 meetings in a
calendar year. One commenter suggests adding ``unexcused'' before
meeting. This is not necessary because the bylaw does not require
removal, but says the board may remove.
Article VII, Board Officers, Management Officials and Executive
Committee
Section 3. This section provides that the chair presides at all
meetings of the board unless suspended by the supervisory committee.
The commenter suggests a 2/3 majority of the board also have the power
to suspend the chair. The Board does not agree. There is no authority
for the board to suspend the chair. There is statutory authority for
[[Page 55763]]
the supervisory committee to suspend any board member. 12 U.S.C. 1761d.
Section 4. This section states that the board must approve all
individuals who are authorized to sign notes, checks, drafts and other
orders of disbursement. The commenter suggests that the board have the
authority to delegate approval authority to the Chief Executive
Officer. The Board believes that this function should remain within the
purview of the board of directors.
Section 6. One commenter objects to the use of the term ``general
manager.'' The commenter suggested a more modern term such as, CEO or
president. The Addendum to this Article of the bylaws allows an FCU to
determine the title and rank of each management official and to use
those titles throughout its bylaws. There is no need to modify this
provision.
Section 6(c). This section requires the FCU to post in its office
in a conspicuous place the FCU's monthly financial statement. Two
commenters object to this requirement. One said it should be deleted
because it's operational and the other suggested that the FCU may want
to post it on the Internet. An FCU may, in addition to posting the
monthly financial statement in its office, post it on the Internet but
because not everyone has access to the Internet, the Board is going to
keep the requirement of posting in the FCU's offices. One commenter
likes the increase from 7 to 20 days to prepare the financial
statement.
Section 6(f). One commenter recommends changing the language in
this section that authorizes the board to ``employ'' to ``the board may
designate, appoint or elect.'' The Board prefers the term ``employ'' to
the suggested language and notes that the bylaw authorizes the
financial officer and not the board as stated by the commenter.
One commenter suggests adding a provision that authorizes the board
to appoint a committee of not less than 3 directors to serve at its
pleasure. This addition is not necessary because section 10 of this
Article allows the board to appoint an executive committee that serves
the same function as the commenter has suggested.
One commenter commends NCUA for allowing FCUs to determine the
title and rank of each board officer and management official.
Article VIII, Option 1 Credit Committee or Option 2 Loan Officers (No
Credit Committee)
Option 1, Section 8 and Option 2, Section 4. These sections require
preference be given to smaller loans if all other factors are nearly
equal. Two commenters object to this provision because FCUs should be
able to make this decision on a case-by-case basis. Although, there is
no specific statute or regulation requiring a preference for small
loans, one of the purposes of an FCU is ``creating a source of credit
for provident or productive purposes.'' 12 U.S.C. 1752(1). Because this
provision enables small credit unions to serve more members, the Board
is retaining it, but changing the language from ``will'' to ``should''
in recognition that it is voluntary.
Option 1, Section 6 and Option 2, Section 2. Two commenters object
to the requirement that the credit committee and loan officers
``endeavor diligently to assist applicants in solving their financial
problems.'' Commenters state that the requirement sets a standard that
is difficult to quantify or achieve and unnecessary and out of place in
the bylaws. Recognizing that one of the purposes of an FCU is to
promote thrift among its members, the Board is retaining this provision
but changing the language from ``will'' to ``should'' in recognition
that it is voluntary. 12 U.S.C. 1752(1).
Article IX, Supervisory Committee
Section 1. This provision states that the supervisory committee
shall consist of not less than 3 nor more than the maximum number
permitted by the Act. One commenter suggests that it say ``5'' since
that's the maximum number permitted by the Act. The Board agrees and
has changed the language in the bylaw to ``5.''
Section 4. This section requires the supervisory committee to
verify the accounts of all members. One commenter suggests it require
the supervisory committee to ``cause the verification.'' The Board
agrees and has modified the language so that it is consistent with the
Act. 12 U.S.C. 1761d. In addition, the commenter suggested ``all
accounts'' may be unnecessary and that a ``representative sampling''
may be more appropriate.
Since NCUA's regulations set forth the specific requirements for
the supervisory committee audit and verification, they do not need to
be repeated in the bylaws. 12 CFR 701.12.
Section 5. One commenter objects to the requirement that the
supervisory committee call a special meeting to vote on the removal of
a suspended director. This requirement is statutory. 12 U.S.C. 1761d.
One commenter suggests holding supervisory committee members to the
same attendance requirements as directors and credit committee members.
Unlike the board of directors and credit committee, there is no
requirement that the supervisory committee hold monthly meetings and
so, the same attendance requirements are not appropriate.
Article XI, Loans and Lines of Credit to Members
Section 1. The proposal tracks the current FCU bylaws and requires
that a loan to a nonnatural person be either share secured or
personally guaranteed. Fourteen commenters object to this requirement.
The commenters note that loans to nonnatural persons are currently
covered in the business loan regulation and that there is no need or
justification for additional requirements in the bylaw. The commenters
note that because of this bylaw federally-insured state-chartered
credit unions have an unfair advantage over FCUs in this area.
The Board agrees that because the requirements for loans to
nonnatural persons are set forth in NCUA's regulations there is no
justification for placing additional requirements for these loans in
the bylaws. 12 CFR part 723. This provision is deleted from the final
bylaws.
Section 2. Five commenters state that this section should be
eliminated because it repeats the requirement in section 1 that the
credit union follow all applicable law and regulations. The Board
agrees and has deleted this provision.
Section 3. This section requires members to pay a late charge as
determined by the board. One commenter suggests that it be deleted. The
Act requires this section to be in the bylaws. 12 U.S.C. 1757(10).
Article XIII, Deposit of Funds
Two commenters object to including this provision in the bylaws
because it's operational. One commenter approves of this provision
because it grants an FCU the discretion to select the number of days
within which to make its deposits. Although this provision is
operational, the Board believes it is helpful for smaller credit unions
and so, it will remain.
Article XV, Minors
This provision states that shares may be issued in the name of a
minor. One commenter states that it should be deleted because it's
already in the Act. 12 U.S.C. 1765. The Board thinks this provision is
important and should be repeated in the bylaws.
Article XVI, Definitions
Four commenters suggest that the definitions be moved to the front
because it's more user friendly. The
[[Page 55764]]
Board agrees that the definitions should not be in the middle of the
bylaws, but rather than place them in the front where they are a
distraction to the reader, the Board has placed them at the end for
easy reference.
Section 1(f). One commenter suggests that ``applicable law and
regulations'' also include ``state law.'' The Board agrees and has
changed the definition to include ``state law.''
Article XVII, General
Section 2. This provision states the requirements for officers,
directors, committee members and employees of the FCU to keep member
transactions confidential. The provision lists some specific exceptions
to the confidentiality requirements. Seven commenters object to this
provision as it's currently drafted. It should be noted that Congress
is currently considering financial reform legislation that will require
NCUA and the other financial institution regulators to issue
regulations governing release of financial information. The commenters
suggest that rather than list specific exceptions that may become
outdated in light of the changing law in this area or may not include
all permissible exceptions, the bylaw should prohibit disclosure except
when permitted by state or federal law. The Board agrees and has
modified the bylaw accordingly.
Section 3. This provision states the authority of the members to
remove officers, committee members and directors. Several commenters
like the deletion of the authority of members to remove employees. Four
commenters suggest that the bylaws either delete the authority of
members to remove officers or define the term ``officer.'' The Board
agrees that the term ``officer'' should be deleted.
Two commenters suggest that a higher number than 15 be required for
a quorum at a special meeting to remove officers and directors. The
Board believes that the number required for a quorum for a meeting of
the members should be consistent throughout the bylaws and has retained
15.
Section 7. One commenter suggests eliminating the requirement that
members keep the FCU informed of their current address. The Board
believes that the bylaws are an appropriate place for this requirement.
Section 8. One commenter suggests using the indemnification
language from the Ohio indemnification statute. The proposal allows an
FCU to indemnify to the extent allowed by state law or the Model
Business Corporation Act. The Board sees no reason to limit an FCU to
one state's law.
Miscellaneous
Two commenters suggest that the bylaws be redrafted to remove all
gender specific references. The Board agrees and has made the
appropriate changes throughout the bylaws.
Two commenters suggest that the bylaws contain the requirement that
an FCU's organization certificate and field of membership amendments be
an appendix to the bylaws. Although Article XVII, Section 5 of the
proposal requires that the FCU keep these documents in a place of
safekeeping, the Board agrees that these documents should be kept with
the bylaws. Section 5 is revised to include this requirement.
Six commenters suggest that the definitions of ``immediate family
member'' and ``household'' be included in the bylaws. The commenters
note that this is particularly important for FCUs that choose to have
more restrictive definitions than those in the regulation. The Board
agrees and has added these terms to the definition section of the
bylaws.
FCUs Adopting Revised Bylaws
There is some confusion about whether the revised bylaws will be
mandatory. Although the proposal stated that ``[b]ecause 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 bylaws,'' a few
commenters objected to the revised bylaws being mandatory. 64 FR at
187. The Board reiterates that the revised FCU Bylaws are not
mandatory.
An issue that has not been addressed is whether FCUs will be
allowed to adopt just part of the revised bylaws. This is particularly
important for FCUs that have nonstandard amendments that are not
addressed in the revised bylaws. The Board, in an effort to achieve
maximum participation by FCUs, will allow them to adopt portions of the
revised bylaws, if an FCU finds that adoption of the entire revised
bylaws is impracticable. The Board cautions FCUs adopting only a
portion of the revised bylaws to use extreme care because they run the
risk of having inconsistent or conflicting bylaw provisions.
In addition, although the Act requires FCUs to use the bylaws
published by NCUA, FCUs will continue to have the flexibility to
request a nonstandard bylaw amendment if the need arises. 12 U.S.C.
1758.
Final Bylaws
The final bylaws are identical to the proposed bylaws unless noted
above in the summary of comments. They will be published as a manual
entitled Federal Credit Union Bylaws. The document will contain an
index that will make it easier to use than the current bylaws that only
have an index for the FCU Bylaws and not the Standard Amendments.
By the National Credit Union Administration Board on October 6,
1999.
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. The credit union may add business as one of its
purposes by placing a comma after ``provident'' and inserting
``business.''
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.
[[Page 55765]]
Section 4. Once a member becomes a member that person may remain a
member until the person or organization chooses to withdraw or is
expelled in accordance with the Act. A credit union that wishes to
restrict services to members no longer within the field of membership
should specify the restrictions in this section.
Article III. Shares of Members
Section 1. The par value of each share will 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 will 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 an 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 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
the member's primary or contingent liability to the credit union if the
member is delinquent as a borrower, or if borrowers for whom the member
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.
(e) The board will have the right, at any time, to impose a fee for
excessive share withdrawals from regular share accounts. The number of
withdrawals not subject to a fee and the amount of the fee will be
established by board resolution and will be subject to regulations
applicable to the advertising and disclosure of terms and conditions on
member accounts.
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, either the
settlor or the beneficiary must be a member of this credit union. 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 will be
treated as an irrevocable trust unless otherwise indicated in the rules
and regulations.
Section 7. Owners of a joint account may both be members of the
credit union without opening separate accounts. For joint membership,
both owners are required to fulfill all of the membership requirements
including each member purchasing and maintaining at least one share in
the account.
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 any 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 suggested order of business at annual meetings of
members is--
(a) Ascertainment that a quorum is present.
(b) Reading and approval or correction of the minutes of the last
meeting.
(c) Report of directors, if there is one.
(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 order of business must comply with ``Robert's Rules of Order.''
Section 5. Except as otherwise provided, 15 members constitute 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
[[Page 55766]]
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 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 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 place in each credit union office
at least 35 days prior to the annual meeting.
Section 2. All elections are 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;
[[Page 55767]]
(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.
{time} 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 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 and the following procedures will be followed:
(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
member and the following procedures will be followed:
(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,
[[Page 55768]]
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 and 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 and credit union account number of the voter as
appearing on the identification form; to place the verified
identification form and the sealed ballot envelope in a place 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 may 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
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 and identification form, and postage prepaid and
preaddressed return envelope;
(d) It is the duty of the tellers of election to verify, or cause
to be verified, the name and credit union account number of the voter
as appearing on the identification form; to place the verified
identification and the sealed ballot envelope in a place of safekeeping
pending the count of the vote; 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 the
preceding subsection (e), 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. __________ (Fill in the number) directors or committee
members may be a paid employee of the credit union. __________ (Fill in
the number) 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.
[[Page 55769]]
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 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 year must be conducted in person. If a quorum is
present in person for the annual in person meeting, the remaining board
members may participate using audio or video teleconference methods.
The other regular meetings may be conducted using audio or video
teleconference methods. The chair, or in the chair's 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
the chair's 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.
Section 7. A majority of the number of directors, including any
vacant positions, constitutes a quorum for the transaction of business
at any meeting; 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 as a
director or a credit committee member, the office may be declared
vacant by the board and the vacancy filled as provided in the bylaws.
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 fill the
position temporarily. 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
[[Page 55770]]
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 chair's absence
or 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.
(d) Ensure that such financial and other reports as the
Administration may require are prepared and sent.
(e) Within standards and limitations prescribed by the board,
employ tellers, clerks, bookkeepers, and other office employees, and
have the power to remove such employees.
(f) 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 financial officer's
temporary absence or 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 management official's
temporary absence or 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 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 must 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 determines:
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.
[[Page 55771]]
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 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 approved or not approved
transaction 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 the
individual has approved as a loan officer.
Section 5. The credit committee holds 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 a manner as the committee may from time to time, by
resolution, prescribe.
Section 6. The credit committee or loan officer must for each loan
or line of credit inquire into the character and financial condition of
the applicant and the applicant's 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 should 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, 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
should be given, in all cases, to the smaller applications if the need
and credit factors are nearly equal.
{time} Option 2--Article VIII. Loan Officers (No Credit Committee)
Section 1. Each loan officer must maintain a record of each
approved or not approved transaction within 7 days of the filing of the
application or request, and such record 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 the individual has
approved as a loan officer.
Section 2. The loan officer must for each loan or line of credit
inquire into the character and financial condition of the applicant and
the applicant's 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 should 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
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 should 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
5. 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 will cause the verification of
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.
[[Page 55772]]
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, the 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 may only be made to members and for provident or
productive purposes in accordance with applicable law and regulations.
Section 2. 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 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. 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 when permitted by state or federal law.
Section 3. Notwithstanding any other provisions in these bylaws,
any director or committee member 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 or her 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. Copies of the organization certificate and field of
membership amendments should be attached as an appendix to these
bylaws. 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. Members must keep the credit union informed of their
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
[[Page 55773]]
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 officers), established by the board of
directors.
Article XVII. 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 of
the board if the members of the board have been given prior written
notice of the meeting and the notice has contained a copy of the
proposed amendment or amendments. No amendment of these bylaws or of
the charter may become effective, however, until approved in writing by
the NCUA Board.
Article XVIII. 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 and state 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 expressions:
(a) ``Organizations of such persons'' means an organization or
organizations composed exclusively of persons who are within the field
of membership of this credit union.
(b) ``Immediate family member'' eligibility is limited to spouse,
child, sibling, parent, grandparent or grandchild. For the purposes of
this definition, immediate family member includes stepparents,
stepchildren, stepsiblings, and adoptive relationships. A credit union
may adopt a more restrictive definition of this term by deleting this
definition from its bylaws and replacing it with its own more
restrictive definition.
(c) ``Household'' is defined as persons living in the same
residence maintaining a single economic unit. A credit union may adopt
a more restrictive definition of this term by deleting this definition
from its bylaws and replacing it with its own more restrictive
definition.
[FR Doc. 99-26716 Filed 10-13-99; 8:45 am]
BILLING CODE 7535-01-P