ALEXANDRIA, Va. (12/4/07)—Federal credit union examiners have received direction from the top about how to view the National Credit Union Administration’s (NCUA’s) recent action re-incorporating federal bylaws into regulations. In a supervisory letter sent both to NCUA examiners and federal credit unions, the agency reiterated its position that reincorporating the bylaws into NCUA’s rules and regulations imposes” no new regulatory burden, as all FCUs are already required to have NCUA-approved bylaws.” “Under the risk-based examination system in use for FCUs, examiners do not currently, nor will they with the reincorporation of the Bylaws, inquire into an FCU’s bylaw disputes unless the FCU’s management raises the issue,” the NCUA letter, signed by David. Marquis, director of the Office of Examination and Insurance, said. The Credit Union National Association (CUNA) in October asked the NCUA to send a clarifying letter – communicating directly with federal examiners—that spells out the agency’s intent that bylaw enforcement will not be part of routine examinations. CUNA President/CEO Dan Mica urged the regulator also to instruct examiners that bylaw disputes should be addressed internally by credit unions before the appropriate NCUA regional director becomes involved. Such a letter, CUNA said, would “go a long way toward helping examiners understand how the rule is to be implemented and assisting federal credit union appreciate the Board meant what it said. In its supervisory letter, the NCUA explains that the bylaws were reincorporated to provide clear authority to act if a bylaw violation threatened a fundamental, material credit union member right. It also reminded that the agency will limit its involvement to bylaw disputes to six areas of members’ rights, which are:
* Maintain a share account; * Maintain credit union membership; * Have access to credit union facilities; * Participate in the director election process; * Attend annual and special meetings; and * Petition for removal of directors and committee members.
Use the resource link below to read the NCUA letter.