November 29, 1995
Daniel P. Bradley, Executive Vice President
DM Federal Credit Union
P.O. Box 15115
Tuscon, AZ 85708-0115
Dear Mr. Bradley:
You have asked this office to review proposed bylaw
amendments that relate to qualifications to serve on a federal
credit union's (FCU's) board of directors. Specifically you ask
if your bylaws could be amended as follows:
Proposed bylaw 1 and 2 would prevent employees and
employees' spouses from serving on the board. Attached is a copy
of Article VIII, Section 7 of the FCU Standard Bylaw Amendments
which specifically provide for this limitation. But, as noted
in the attached October 18, 1994, letter from me to Ms. Helen
McFarland, "(u)nder any of these provisions, an individual
may run for the board and be elected; he then has the choice of
retaining his position as an employee or serving as a director."
Proposed bylaw 3 places term limits on directors.
This is not a permissible nonstandard bylaw amendment. See
attached August 19, 1992, letter from Hattie M. Ulan, Associate
General Counsel to Mr. Clarence Fry which specifically addresses
this issue.
Proposed bylaw 4 places a maximum age on directors.
For the reasons stated in the attached August 19, 1992, letter,
this is not a permissible nonstandard bylaw amendment.
You then ask if a policy that is not permissible
as a nonstandard bylaw amendment could be a permissible nominating
committee policy, and if so, why. Article VI of the FCU Bylaws
gives the nominating committee discretion to set standards for
determining who it may nominate. However, this does not bar someone
who does not meet the nominating committee's standards from seeking
nomination by petition and/or from the floor, whichever the bylaws
allow. The opinions letters already cited will provide additional
guidance. Although Article VI gives the nominating committee
discretion to set standards, the policies should be carefully
reviewed to ensure that they are rationally related to the duties
of a director and do not violate any laws. For example, a policy
setting a maximum age may fail both tests.
Sincerely,
Richard S. Schulman
Associate General Counsel
GC/MFR:bhs
SSIC 3500
95-1125
Enclosures