"The position adopted in the 1980s has resulted in little to no enforcement of some of the members' most critical rights the bylaws seek to protect, and state courts are understandably reluctant to become involved in bylaw disputes," she said.

"This represents a change with a very real implication for the nation's credit union members, and it is something that anyone with any interest in protecting consumers cannot let stand without considering remedies," Johnson added.

"After weighing the pros and cons, it appears to me that incorporating the bylaws into the regulations is the most direct and straightforward way to clarify our authority to enforce bylaw violations in appropriate cases," she said. "I believe now is the right time for NCUA to step forward and once again make itself available to protect the rights of both members and the credit unions that they own."

Bylaw disputes have gained more attention over the last few years after DFCU Financial, headquartered in Dearborn Mich., refused to hold a special meeting at which some or all of the board could be recalled after members petitioned the CU according to the bylaws for the meeting.

Johnson did not give a definitive timeline on when the agency would unveil its proposal.

She also sought to reassure the attendees that the agency was not looking to get involved in routine bylaw disputes, and that NCUA would issue guidelines with its proposal seeking to lie out when it would get involved.

There was some concern expressed about Johnson's announcement.

Helen Godfrey Smith, CEO of the $56 million Shreveport Federal Credit Union and board member of the National Federation of Community Development Credit Unions said she feared NCUA was "headed backward" with the proposed bylaw regulations. "It seems like we are returning to a time when NCUA took more control over things at credit unions," she said.

Wendell "Bucky" Sebastian, CEO of the $2.1 billion GTE Federal Credit Union said he also disagreed with the agency about the issue. Sebastian agreed with Johnson that the agency already had the authority to intervene in bylaw disputes, even if the bylaws were not formally part of regulations, but disagreed with her contention that the agency could currently only use its most severe penalties in its intervention.

"I think a fair and more accurate reading of the law would indicate that the agency can use any of its remedies up to the most severe ones," Sebastian said. "Not that it can only use the most severe ones."

But Sebastian also said he saw the need for the agency to act in regard to the bylaw disputes, something that Johnson touched on as well as she compared the current, somewhat unstable and new environment in which credit unions found themselves in compared to when NCUA first made the bylaws part of its regulations.

Then as now, Johnson explained, the agency had to play a role in bylaw disputes as both credit union and credit union members had grown in their understandings of what being members of a democratically governed, member owned, financial cooperative really meant.

Gradually the need for the agency to intervene in bylaw disputes had faded, which she seemed to imply, would likely happen again over time. –[email protected]