CUNA Regulatory Comment Call
January 10, 2003
NCUA Amends Corporate Federal Credit Union Bylaws(NOT A MAJOR RULE)
The NCUA Board issued a proposal revising the Corporate Federal Credit Union Bylaws to update, modernize and clarify these rules. The proposed revisions, published in the Federal Register on December 27, 2002 are due on February 25, 2003. Please click here for a copy of the proposal.
NCUA strongly encourages corporate federal credit unions (corporates) to adopt the revised bylaws when they are finalized, but corporates are not required to do so. They may use the old bylaws or substitute certain provisions of the new bylaws into their existing bylaws. NCUA cautions corporates that if they only use certain portions of the bylaws, their bylaws may be inconsistent. NCUA's corporate bylaws are binding on corporates, but the NCUA routinely approves requests for individual corporate changes.
In general, the more important bylaw changes allow for the following:
- A member may remain a member if he or she leaves the field of membership under certain circumstances.
- The required notice for meetings can include electronic delivery.
- A quorum at annual or special meetings is defined as the lesser of 15 members or 20 percent of the membership.
- Elections can be conducted by electronic means.
- Results of elections must now be reported to the NCUA.
- There are also proposed changes in regards to the conduct of meetings. Special meetings can be held by teleconference. One in-person meeting per year is required, not one per quarter. The board must appoint an Asset Liability Management Committee of not less than three, including at least one board member.
- The proposed bylaws emphasize corporate preparation for a disaster. The new bylaws, if approved as written, would require the maintenance and periodic testing of an organization-wide contingency plan that addresses all reasonable emergency and disaster scenarios.
Please send your comments to CUNA by February 10, 2003. Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Associate General Counsel Mary Dunn or Assistant General Counsel Michelle Profit at email@example.com or firstname.lastname@example.org; or mail them to Mary or Michelle c/o CUNAs Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, Suite 600, Washington, D.C. 20004-2601.
The final bylaws will contain a table of contents. The changes to the bylaws are listed below by article:
Article II - Renumbered Article III: Membership
- Section three was eliminated because it is not applicable to current corporate operations.
- Section 4 has been amended to allow a member to remain a member until the person or entity withdraws or is expelled. It also permits a corporate to restrict services to a member no longer in the field of membership and addresses the termination of membership in the case of a member converting to another form of financial institution.
- Section 5 regarding the operation procedures for expulsion or withdrawal of a member of the corporate have been deleted.
Article III Renumbered Article IV: Share of Members
- Section 1 now requires the payment of the share to be made at the time of subscription instead of in installments. This change reflects current corporate procedure.
- Sections 2, 3, 6, and 7 were deleted because they were operational in nature and antiquated.
Article IV - Renumbered Article V: Meetings of Members
- Section 2 has been revised to allow for electronic delivery.
- Section 3 was amended to allow a special meeting to be called by 5 percent of the members instead of at least 25 members. This relaxed the threshold for smaller corporates.
- Section 4 was amended so a quorum at an annual or special meeting is defined as the lesser of 15 members or 20 percent of the membership; this replaces the requirement that 15 members are necessary for a quorum.
Article V - Renumbered Article VI: Elections
- Section 1 has been revised to allow for members to consent to the electronic delivery of documents.
- Section 2 has been revised to allow for elections by electronic devices, including telephone and electronic mail. This section also revises the rules of elections to clarify that: elections are determined by plurality vote; candidates must have biographies and statements of qualifications; candidates names on ballots must be ordered by lot drawings; and the secretary verifies the vote at the annual meeting.
- Section 3 regarding proxy voting was deleted because it has been replaced.
- Section 4 regarding mail balloting was deleted because it has been replaced.
- Section 5 has been added; it requires notification to NCUA of the names and addresses of various officials and committee members.
Article VI - Renumbered Article VII
- Section 4 has been revised to allow teleconference methods for conducting special meetings. The requirement for in-person meetings has been relaxed from one per quarter to one per year.
- Section 7 has been revised to allow credit committee members to be temporarily replaced by a designee of the board. In addition, the board may designate a member or members of the corporate to act on all committees mentioned in this section, when necessary to attain a quorum. This was broadened from just the credit committee.
Article VII - Renumbered Article VIII
- Section 10 and 11 have been revised so that the Asset Liability Management Committee replaces the investment committee and now requires three people instead of two.
Article VIII - Renumbered Article IX
- Section 2 has been revised to include qualified corporate credit union staff as eligible for selection to the credit committee.
Article X, XI and XIII
- These articles have been deleted.
Article XIV - Renumbered Article I
- Some terms in this article have been deleted and others have been added.
Article XV Renumbered Article XI
- Section 1 has been renumbered so that the confidentiality of members transactions is sacrosanct except as permitted by state or federal law. Before, the confidentiality of members transactions was qualified except to the extent deemed necessary by the board.
- Section 2 has been revised to state that the ALCO members as well as any member of the credit committee or the supervisory committee that has been disqualified must withdraw from deliberation or determination of a committee matter.
Article XVI Renumbered Article XII
- Section 1-3 have been revised to require the maintenance and periodic testing of an organization-wide contingency plan that addresses all reasonable emergency and disaster scenarios.
QUESTIONS REGARDING THE PROPOSAL
- Does your credit union support the changes that allow for electronic elections, notices and conferences?
- Does your credit union support the provision that allows a credit union to remain a member until they withdraw or are expelled?
- Does your credit union support the provision that permits a corporate to restrict services to a member no longer in the field of
membership and addresses the termination of membership in the case of a member converting to another form of financial institution?
- Do you support the relaxation of quorum requirements and member requirements for calling a special meeting?
- Would this proposal result in costs or benefits to your organization? Please explain.
Please submit your address and phone number.
Eric Richard General Counsel (202) 508-6742 email@example.com |
Mary Mitchell Dunn SVP & Associate General Counsel (202) 508-6736 firstname.lastname@example.org
Jeffrey Bloch Assistant General Counsel (202) 508-6732 email@example.com
Catherine Orr Senior Regulatory Counsel (202) 508-6743 firstname.lastname@example.org