April 5, 1995
William J. Sayres
Avery Road
Garrison, N.Y. 10524
Dear Mr. Sayres:
You requested our opinion on the implications of the nomination
policies of Hudson Valley Federal Credit Union (FCU). This office
can only give you its legal analysis of the policies in question.
The nominating committee policy that affects you states a "credit
union employee and/or his/her spouse cannot be considered for
nomination until five (5) years after the cessation of that employment
in order to avoid conflict of interest." As Region I Director
Layne L. Bumgardner advised you on December 7, 1994, the nominating
committee can establish eligibility standards it will consider
for nominations to the board. The policy in question is legally
permissible and was previously approved by the NCUA.
Although you do not qualify for nomination under the nominating
committee's criteria, you are eligible for nomination by petition.
You advise that the requirements for nomination by petition make
it very difficult for an individual to achieve nomination through
this process. One of the policies you complain of is the requirement
that the name and address on the petition must "exactly"
match and identify the person who signed the petition and their
signature card. While the policy does not appear to be excessively
burdensome on its face, it may be unfairly applied. An example
of an unfair application of the policy would be if the nominating
committee invalidates a petition signature when it is clear that
the signature is authentic except for a missing middle initial
or the address lacks the zip code.
We agree that the FCU's policy of not permitting petition solicitations
on credit union premises makes it difficult to gather the requisite
number of signatures for nomination. Barring any potential safety
or security hazards, the FCU could establish a controlled procedure
whereby candidates could station themselves in an unobtrusive
location on or near the FCU at certain hours and on certain dates.
As this issue is not addressed by either the FCU Act or NCUA's
Rules and Regulations, it is within the credit union's discretion
to set this policy.
It is NCUA's policy not to become involved in election disputes
that do not pose a threat to the safety and soundness of the credit
union or conflict with the Act or Regulations. This office advised
Mr. Heinz Walter of Hudson Valley FCU, formerly known as IBM Hudson
Valley Employees FCU of this policy when the credit union was
previously involved in an election dispute. (See attached April
30, 1991, Letter from Hattie M. Ulan, Associate General Counsel
to Mr. Heinz Walter.)
We have opined that it is permissible for an FCU to require the
petitions for board of director nominations include the account
numbers of members signing the petition. (See attached February
8, 1990, Letter from Hattie M. Ulan, Associate General Counsel
to Michael LaBarbera, Esq.). If you believe the FCU's policies
make it practically impossible to independently run for the board,
you should contact private counsel for advice on New York corporate
common law and other assistance.
Sincerely,
Richard S. Schulman
Associate General Counsel
GC/MFR:bhs
SSIC 3100
95-0328
Enclosures
cc: Region I Director