The NCUA board Thursday approved a plan to seek ways to update standard federal credit union bylaws.

During a brief meeting, board members said it wanted to solicit ideas about how to improve the bylaws, which are mandatory for any federal credit that had not adopted its own bylaws by Nov. 30, 2007.

“We have a clean slate within the contours of the Federal Credit Union Act,” Board Chairman J. Mark McWatters said. He added, however, that many suggestions he hears about improving the standard bylaws are not allowed by federal law.

Board member Rick Metsger agreed, asking commenters, “Please tell us why this might be legal.”

The board is asking for stakeholders to address several issues, but also is seeking general comments about the bylaws.

The specific issues the board is seeking comment on include:

The bylaw amendment process. Credit unions have reported that amending their bylaws is complicated and time consuming. Current rules governing bylaws do not set a timeframe for NCUA approving proposed changes.
Limitation of service and expulsion of members. Credit unions have said that the required bylaws regarding their ability to limit service to people are not clear. The agency is asking how the bylaws could be improved or if this issue should be addressed in regulations rather than bylaws.
Recruitment and development of directors. The current bylaws do not provide guidance on how a nominating committee should identify prospective board members.
Attendance at annual and special meetings. The board is seeking comment on whether the advance notice of meetings is sufficient. In addition, the agency wants to know how new technology can be used to allow members to attend meetings. For instance, the board is seeking comment on whether a federally insured credit union should be able to hold meetings through teleconferencing.
Overlaps between bylaws and NCUA rules. The board is seeking examples of cases in which the same issue is addressed in the required bylaws and NCUA rules.

Also, at Thursday's meeting, the board approved a plan to seek comment on establishing a formal procedure for the debarment and suspension of agency contractors.

Instant Insights /

NCUA Seeking Comment on Possible Changes to Bylaws

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