The Federal
Credit Union Bylaws
Federal Credit
Union Bylaws
(Rev. 10/99) – 64 Fed. Reg. 55760 (Oct. 14, 1999)
With Preamble
As published in the Federal Register
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Preamble
7535-01-U
NATIONAL
CREDIT UNION ADMINISTRATION
Federal Credit
Union Bylaws
AGENCY: National
Credit Union Administration (NCUA).
ACTION: Notice
of Federal Credit Union Bylaws
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had become outdated or obsolete.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consolidating the bylaws into one publication, deleting outdated and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in one place; plain English is used; provisions that are outdated are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 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.
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 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 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 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
FOREWORD
The Federal Credit Union
Bylaws were adopted by the National Credit Union Administration (NCUA)
Board on October 6, 1999. These bylaws define the scope of the credit
union's activities, its powers, and the duties and responsibilities
of its officials. They have been designed to give the board of directors,
the credit and supervisory committees, and executive officers maximum
authority together with appropriate responsibility for the sound management
and proper operation of the credit union. These bylaws are not effective
until the board of directors adopts them and the secretary completes,
initials and dates all blank areas and selected options consistent with
the board of directors' adopted policy in each case.
A federal credit union may
retain its current bylaws, adopt these revised bylaws in their entirety
or retain portions of its current bylaws and adopt portions of these
revised bylaws. Federal credit unions are encouraged to adopt the revised
bylaws because they are now written in plain English and offer more
flexibility than prior versions. Federal credit unions adopting only
a portion of these revised bylaws are cautioned to use extreme care
because they run the risk of having inconsistent or conflicting bylaw
provisions. Unless adopted by a federal credit union prior to October
14, 1999, all prior versions of the Federal Credit Union Bylaws are
no longer in effect. In addition, although federal credit unions are
required to use the bylaws published by NCUA, federal credit unions
will continue to have the flexibility to request a nonstandard bylaw
amendment if the need arises.
Nonstandard bylaw amendments
must be approved by the NCUA Board before they become effective. A federal
credit union wishing to adopt a nonstandard bylaw amendment should file
the request with its Regional Director. The request should include the
following information:
1. The section of the bylaws
to be amended;
2. The reason why the
amendment is desirable or necessary;
3. What the proposed
amendment will accomplish for the credit union; and
4. The proposed wording
of the amendment.
Upon receipt of this information,
NCUA will advise the credit union whether the proposed amendment is
approved.
/S/
Norman E. D'Amours
Chairman
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.
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 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.
__ 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.
__ 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.
__
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;
(b) If sufficient
nominations are made by the nominating committee or by petition to provide
more than one nominee for any position to be filled, the secretary,
at least 10 days prior to the annual meeting, will cause ballot boxes
and printed ballots, or voting machines, to be placed in conspicuous
locations, as determined by the board of directors with the names of
the candidates posted near the boxes or voting machines. The name of
each candidate will be followed by a brief statement of qualifications
and biographical data in a form approved by the board of directors;
(c) After
the members have been given 24 hours to vote at conspicuous locations
as determined by the board of directors, the ballot boxes or voting
machines will be opened, the vote tallied by the tellers, the tallies
placed in the ballot boxes, and the ballot boxes resealed. The tellers
are responsible at all times for the ballot boxes or voting machines
and the integrity of the vote. A record must be kept of all persons
voting and the tellers must assure themselves that each person so voting
is entitled to vote; and
(d) The ballot
boxes will be taken to the annual meeting by the tellers. At the annual
meeting, printed ballots will be distributed to those in attendance
who have not voted and their votes will be deposited in the ballot boxes
placed by the tellers, before the beginning of the meeting, in conspicuous
locations with the names of the candidates posted near them. After such
members have been given an opportunity to vote at the annual meeting,
balloting will be closed, the ballot boxes opened, the vote tallied
by the tellers and added to the previous count, and the chair will announce
the result of the vote.
__
Option A4 - Election by electronic device (including but not limited
to telephone and electronic mail) or mail ballot; nominating committee
and nominations by petition
Section 1.
At least 120 days prior to each annual meeting, the chair will appoint
a nominating committee
of not fewer than three members. It is the duty of the nominating
committee to nominate at least one member for each vacancy, including
any unexpired term vacancy, for which elections are being held, and
to determine that the members nominated are agreeable to the placing
of their names in nomination and will accept office if elected. The
nominating committee files its nominations with the secretary of the
credit union at least 90 days prior to the annual meeting, and the secretary
notifies in writing all members eligible to vote at least 75 days prior
to the annual meeting that nominations for vacancies may also be made
by petition signed by 1% of the members with a minimum of 20 and a maximum
of 500.
The written
notice must indicate that the election will not be conducted by ballot
and there will be no nominations from the floor when there is only one
nominee for each position to be filled. A brief statement of qualifications
and biographical data in a form approved by the board of directors will
be included for each nominee submitted by the nominating committee with
the written notice to all eligible members. Each nominee by petition
must submit a similar statement of qualifications and biographical data
with the petition. The written notice must state the closing date for
receiving nominations by petition. In all cases, the period for receiving
nominations by petition must extend at least 30 days from the date of
the petition requirement and the list of nominating committee's nominees
are mailed to all members. To be effective, such nominations must be
accompanied by a signed certificate from the nominee or nominees stating
that they are agreeable
to nomination and will serve if elected to office. Such nominations
must be filed with the secretary of the credit union at least 40 days
prior to the annual meeting and the secretary will ensure that nominations
by petition along with those of the nominating committee are posted
in a conspicuous 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, 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.
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 prededing 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.
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.
__
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.
__
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 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.
__
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.
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.
__
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.
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 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.
Acredit 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 .
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