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News Now

Washington
Members Must Be Present To Remove Directors, NCUA Opines
ALEXANDRIA, Va. (4/4/13)--The use of mail ballots in a director removal election violates federal credit union bylaws, National Credit Union Administration General Counsel Michael McKenna said in a legal opinion letter released Wednesday.

The NCUA incorporated federal credit union bylaws into its regulations in 2007, and has full authority to interpret and enforce them, McKenna added.

The bylaws, McKenna explained, hold that a credit union's director or committee member may be removed from office by the affirmative vote of a majority of members present at a special meeting called for the purpose. The director or committee member in question must also be given an opportunity to be heard.

"The use of the phrase 'present at a special meeting' precludes the possibility of voting in absentia by mail to remove a director," McKenna wrote. "If voting by mail were allowed in lieu of being present, members would be denied the opportunity to observe the director's demeanor, hear the director's defenses, and ask the director questions. The give and take that is part of being present at a special meeting provides a director with more due process and better informs the membership," he added.

McKenna in the letter also said state laws "play no role in determining governance issues where the federal credit union bylaws are clear and unambiguous." However, McKenna added, the agency may choose to defer to state law on certain issues where the Federal Credit Union Act and federal credit union bylaws laws are silent or sufficiently ambiguous to warrant state law consideration.

The NCUA legal opinion letter responded to a question from attorney and former NCUA Assistant General Counsel Steven Bisker.

For the full letter, use the resource link.


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