Federal Credit Union Bylaws, 30984-30988 [E7-10389]
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30984
Federal Register / Vol. 72, No. 107 / Tuesday, June 5, 2007 / Proposed Rules
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Argentina
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5. A new § 319.56–2vv would be
added to read as follows:
§ 319.56–2vv Administrative instructions:
conditions governing the importation of
blueberries from South Africa and Uruguay.
Blueberries from South Africa
(Vaccinium spp.) and Uruguay
(Vaccinium corymbosum L. and
Vaccinium virgatum Aiton) may be
imported into the continental United
States only under the following
conditions:
(a) Blueberries from South Africa
must be cold treated for Ceratitis
capitata in accordance with part 305 of
this chapter. Blueberries from Uruguay
must be cold treated for Ceratitis
capitata and Anastrepha fraterculus in
accordance with part 305 of this
chapter.
(b) Each shipment of blueberries must
be accompanied by a phytosanitary
certificate of inspection issued by the
national plant protection organization of
the importing country.
(c) The blueberries may be imported
in commercial shipments only.
Done in Washington, DC, this 31st day of
May 2007.
Kevin Shea,
Acting Administrator, Animal and Plant
Health Inspection Service.
[FR Doc. E7–10818 Filed 6–4–07; 8:45 am]
BILLING CODE 3410–34–P
NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Part 701
Federal Credit Union Bylaws
National Credit Union
Administration (NCUA).
ACTION: Proposed rule.
AGENCY:
SUMMARY: NCUA is proposing to
reincorporate the Federal Credit Union
(FCU) Bylaws into NCUA regulations.
This change clarifies NCUA’s ability to
use a range of enforcement authorities,
in appropriate cases, to enforce the FCU
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Fruit. (Treatment for South American
fruit fly and Medfly not required if
fruit is grown in a fruit fly-free area
(see § 319.56–2(j)).
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Bylaws. In addition, NCUA is adding a
bylaw provision on director succession,
an issue it has previously addressed in
legal opinions, and is revising the
introduction to the Bylaws to conform it
to these changes.
DATES: Comments must be received by
August 6, 2007.
ADDRESSES: You may submit comments
by any of the following methods (Please
send comments by one method only):
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• NCUA Web Site: https://
www.ncua.gov/
RegulationsOpinionsLaws/
proposed_regs/proposed_regs.html.
Follow the instructions for submitting
comments.
• E-mail: Address to
regcomments@ncua.gov. Include ‘‘[Your
name] Comments on FCU Bylaws’’ in
the e-mail subject line.
• Fax: (703) 518–6319. Use the
subject line described above for e-mail.
• Mail: Address to Mary Rupp,
Secretary of the Board, National Credit
Union Administration, 1775 Duke
Street, Alexandria, Virginia 22314–
3428.
• Hand Delivery/Courier: Same as
mail address.
Public inspection: All public
comments are available on the agency’s
Web site at https://www.ncua.gov/
RegulationsOpinionsLaws/comments as
submitted, except as may not be
possible for technical reasons. Public
comments will not be edited to remove
any identifying or contact information.
Paper copies of comments may be
inspected in NCUA’s law library, at
1775 Duke Street, Alexandria, Virginia
22314, by appointment weekdays
between 9 a.m. and 3 p.m. To make an
appointment, call (703) 518–6546 or
send an e-mail to OGC Mail @ncua.gov.
FOR FURTHER INFORMATION CONTACT:
Elizabeth Wirick, Staff Attorney, Office
of General Counsel, National Credit
Union Administration, 1775 Duke
Street, Alexandria, Virginia 22314–3428
or telephone: (703) 518–6540.
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SUPPLEMENTARY INFORMATION:
A. Background
The Federal Credit Union Act (the
Act) requires the NCUA Board to
prepare bylaws that ‘‘shall be used’’ by
FCUs and authorizes NCUA to enforce
FCU Bylaws through charter suspension
and liquidation. 12 U.S.C. 1758, 1766.
Until 1982, the FCU Bylaws were
incorporated by reference in NCUA’s
regulations. NCUA’s authority to
enforce bylaw violations through less
severe administrative remedies then was
clear because such violations could be
viewed as a violation of NCUA’s
regulations, thus enabling NCUA to
bring a variety of administrative
enforcement actions to effect
compliance in appropriate cases.
In 1982, the Bylaws were removed
from the regulations as part of a general
deregulatory effort. At that time, three
separate sections of NCUA regulations
incorporated the FCU Bylaws by
reference. 12 CFR 701.2, 701.3, 701.14
(1982). Another section required NCUA
approval of any bylaw amendments. 12
CFR 701.4 (1982). NCUA deleted two of
the sections incorporating the Bylaws by
reference, as well as the regulation
requiring NCUA approval of
amendments, in two final rules issued
in 1982. 47 FR 23685 (June 1, 1982); 47
FR 46249 (Oct. 18, 1982).
These rules were one result of a
comprehensive review of agency
regulations NCUA undertook in the
early 1980s in an effort to eliminate
redundant or outdated requirements.
The goal of this process was to reduce
the number and complexity of NCUA
regulations and delete guidance found
in other publications. 47 FR 46249 (Oct.
18, 1982). The Bylaws were only one of
several items deleted from incorporation
by reference in the 1982 rules cited
above. One of the rules also deleted the
NCUA Accounting Manual and Data
Processing Guidelines from
incorporation by reference. 47 FR 23685
(June 1, 1982). The other also deleted
references to chartering procedures
contained elsewhere in NCUA guidance.
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47 FR 46249 (Oct. 18, 1982). The
discussions in the proposed and final
rules and at the NCUA Board meetings
focus on the other provisions in the
rules, with very little information about
the Bylaws. Id.; 47 FR 23750 (June 1,
1982); 47 FR 23686 (June 1, 1982); 46 FR
48940 (Oct. 5, 1981); Recordings of
NCUA Board Meetings Sept. 24, 1981;
May 20, 1982 and Sept. 23, 1982. The
sole comment about the Bylaws
available in the administrative record is
in the preamble to one of the final rules,
and it states: ‘‘The commenters also
were in agreement with NCUA’s
deregulation of charter and bylaw
provisions and condensation of
chartering procedures.’’ 47 FR at 46249.
The Board’s 1982 actions resulted in
the retention of one section
incorporating the Bylaws by reference,
§ 701.2, which was not deleted until
1999. 12 CFR 701.2 (1982–1999).
Although one of the 1982 rules deleted
other publications incorporated by
reference in § 701.2, while leaving the
reference to the Bylaws intact, the
proposed and final rules do not explain
this action. 47 FR 23685 (June 1, 1982);
46 FR 48490 (Sept. 24, 1981). NCUA
deleted § 701.2 as a technical
amendment in 1999. 64 FR 57363 (Oct.
25, 1999). After reviewing the entire
record, retention of the incorporation of
the bylaws in § 701.2 appears to have
been an oversight.
When the Bylaws were deregulated in
1982, the rule changes did not address
the issue of whether the agency would
enforce the Bylaws or intervene in
disputes concerning the Bylaws.
NCUA’s policy not to become involved
in bylaw disputes unless the bylaw
violation threatens the safety and
soundness of the credit union or
violates a provision of the FCU Act or
NCUA regulations evolved in various
issuances and procedures after 1982.
Numerous legal opinion letters state this
policy, as well as NCUA’s position that
the Bylaws represented a contract
between a credit union and its members.
NCUA’s view was that state corporate
law, if consistent with the Act and
NCUA regulations, determined disputes
regarding the enforcement of bylaw
provisions. As a result of the
deregulation of the bylaws, NCUA’s
ability to enforce the Bylaws, absent a
safety and soundness reason, has
become problematic.
NCUA’s post-deregulatory policy has
sometimes had the effect of requiring
FCU members to resort to state court
action in order to force their credit
union to abide by its bylaws. While this
approach worked fairly well for the
most part over the years, recently,
NCUA has learned of cases where
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members have been unable to use the
judicial system to enforce rights granted
by the Bylaws. While NCUA continues
to maintain members can enforce the
bylaws as a contract, the Board
recognizes that, in certain
circumstances, this remedy may not be
practical or provide adequate relief due
to circumstances such as timing and
cost.
As the administrative record
demonstrates, the Board did not foresee
the current challenges members can face
in seeking to enforce the bylaws when
it deregulated the Bylaws in 1982 in an
effort to eliminate redundancy and
maximize flexibility for FCUs. At this
time, the Board finds reincorporating
the bylaws into NCUA’s regulations is
an appropriate step. Reincorporation is
the least burdensome way to ensure
FCUs and their members are aware of
NCUA’s authority to issue and enforce
the Bylaws under the Act.
Congress has provided the Board
explicit authority in the Act to suspend
or revoke the charter of any FCU, or
place the FCU into involuntary
liquidation, for a violation of any
provision of its bylaws. 12 U.S.C.
1766(b)(1). A charter suspension or
liquidation, however, is a very extreme
remedy and is unlikely to be an
appropriate remedy for any bylaw
violation. The resultant loss of credit
union service would likely result in far
more harm to members than the FCU’s
failure to follow its bylaws.
NCUA believes the better approach is
to reincorporate the Bylaws into
NCUA’s regulations. The Board believes
credit unions and their members should
be able to resolve bylaw disputes
without NCUA taking administrative
action. In those rare cases where
disputes cannot be resolved, NCUA will
have clear authority to use a range of
administrative actions. This will result
in administrative remedies far less harsh
than a charter suspension or liquidation
to effect a credit union’s compliance
with its bylaws.
Reincorporating the Bylaws into
NCUA’s regulations imposes no new
regulatory burden, as all FCUs are
already required to have NCUAapproved bylaws. NCUA publishes form
bylaw language and all FCUs have
adopted some version of the form
language. The latest version of the
Bylaws allows FCUs flexibility
wherever possible by providing checkoff or fill-in-the-blank options that can
be adopted without further NCUA
action. NCUA’s regional directors must
approve all other bylaw amendments.
NCUA will approve all proposed bylaw
amendments that do not conflict with
the Act or NCUA regulation and
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guidance, present a potential safety and
soundness threat, or restrict members’
rights. NCUA does not maintain copies
of each FCU’s bylaws and bylaw
amendments.
In considering reincorporation, the
Board again thought about whether it
should continue to prescribe model
bylaw language or whether it should, as
suggested by several commenters during
the 2006 Bylaw revision process,
prescribe only general categories and
allow FCUs to draft their own bylaws.
The Board’s concerns with this
approach remain the potential for
confusion and the adoption of illegal
bylaw provisions. While some previous
commenters suggested a categories-style
rule, others, including credit union
employees and credit union legal
representatives, have indicated that
having form Bylaws is an aid and is not
overly burdensome. Credit union staff
members and boards of directors know
that the Bylaws are a condensation of
some requirements in the Act, NCUA
regulations, and NCUA guidance. For
most, the option to draft bylaws
completely on their own is unattractive
because of the amount of research
required to ensure inclusion of all
necessary provisions. Also, presumably,
NCUA would have to adopt some
oversight mechanism to prevent
adoption of bylaw provisions that are
inconsistent with statutory and
regulatory requirements or present
safety and soundness concerns. Because
NCUA does not now maintain copies of
individual FCU bylaws or review
bylaws in examinations as a matter of
course, having a category-type
regulation would likely result in more
regulation, not less.
The Board also considered modeling
its bylaw regulation on the approach
used by the Office of Thrift Supervision
(OTS). The OTS has detailed regulations
listing required bylaw provisions and
also provides model bylaw language
separately. 12 CFR 544.5, 552.5; OTS
Applications Handbook, Forms 1577,
1508. The model language is mostly a
restatement of the regulation. Id. Thrifts
are not required to adopt the model
language exactly, and, like FCUs, may
also adopt certain optional provisions.
All amendments, including the model
option provisions, must be filed with
OTS. 12 CFR 544.5(d), 552.6(c). The
result of the OTS approach is similar to
NCUA’s. Both federal thrifts and FCUs
have form bylaw language. Although the
regulation permits thrifts to adopt their
own language rather than the model,
drafting bylaws that comply with the
requirements of the regulation results in
bylaws nearly indistinguishable from
the form bylaws. Both federal thrifts and
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FCUs are allowed to select certain
options without further agency action,
but thrifts must file all amendments
with OTS. After considering the OTS
approach, the Board continues to
believe that incorporating the Bylaws by
reference into NCUA’s regulations is the
most expeditious and least burdensome
approach.
The proposed rule will give NCUA
authority to enforce bylaw violations in
certain, limited cases through
administrative tools in the Act.
Incorporating the FCU Bylaws into
NCUA’s regulations will not mean
NCUA will become involved as a matter
of course in bylaw disputes. The Board
believes credit union officials and
members should be able to work
together to resolve the vast majority of
bylaw and internal governance disputes.
This was true before 1982 when the
Bylaws were incorporated by reference
in NCUA’s regulations and, as was the
case then, NCUA has no intention of
using agency resources to enforce every
bylaw violation. Furthermore, under the
risk-based examination system in use
for FCUs, examiners do not currently,
nor will they under this proposed rule,
inquire into an FCU’s bylaws unless the
FCU’s management raises the issue.
A credit union’s management,
however, should not be able to ignore
the Bylaws unilaterally. Members have
a reasonable expectation that their
credit union will be operated in
accordance with its approved bylaws.
NCUA already has the authority to
exercise its administrative enforcement
authority when a credit union violates
the Act or NCUA regulations or a threat
to the safety and soundness of the
institution exists. NCUA also believes it
should have the ability to institute an
enforcement action when a bylaw
violation poses a threat to fundamental,
material credit union member rights.
These rights are those that go to the very
heart of the cooperative principles that
serve as the cornerstone of the credit
union system. Specifically, they include
the right to:
• 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.
It continues to be NCUA’s intent that
credit unions and their members will
make every effort to resolve bylaw
disputes without NCUA intervention. If
a bylaw dispute cannot be resolved,
however, credit union officials or
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members should contact the regional
office with jurisdiction for the FCU.
Regional offices have substantial
experience in reviewing and working
with credit unions on bylaw disputes, as
well as proposed bylaw amendments.
The regional offices have historically
assisted credit union officials and
members in resolving bylaw and
internal governance disputes. However,
if a matter involves fundamental,
material credit union member rights,
NCUA will have clear discretion to take
administrative action as warranted. The
Board believes this is preferable to
requiring credit unions and their
members to resort to the state courts,
with the attendant expense, time delays
and uncertainty regarding bylaw
enforceability.
B. Specific Changes to the FCU Bylaws
NCUA issued an updated and revised
version of the FCU Bylaws in 2006. 71
FR 24551 (April 26, 2006). Because the
revised Bylaws were issued so recently,
NCUA believes another major review is
unnecessary at this time. The Board
believes, however, this rulemaking
presents an appropriate opportunity to
address one particular circumstance
previously only addressed in legal
opinions, namely, the responsibility of
the Supervisory Committee to assume
the responsibilities of the board of
directors temporarily if, for any reason,
an entire board of directors is
simultaneously removed or unable to
serve. See OGC Opinion 06–0446 (April
27, 2006). This proposed rule adds new
provisions to the Bylaws clarifying
responsibilities and procedures if, for
any reason, including removal or other
inability to serve, an FCU has no
remaining directors. This proposed rule
also revises the introduction to the
Bylaws to reflect the reincorporation of
the Bylaws in the regulations.
The proposal adds a new Section to
Article IX to clarify the Supervisory
Committee’s responsibilities if an FCU
has no remaining directors. If an entire
board of directors resigns, is removed
simultaneously, or for whatever
circumstance is unable to serve, the
Supervisory Committee has the
responsibility to act as a temporary
board of directors. As has been
previously stated in NCUA legal
opinions, the FCU Bylaws will now
provide that, as the temporary board of
directors, the Supervisory Committee
must either schedule a special meeting
to elect an interim board, or, if the credit
union’s next annual meeting of
members will occur within 45 days after
the FCU loses its directors, must serve
as the temporary board until the next
annual meeting.
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NCUA believes this provision belongs
in Article IX, entitled ‘‘Supervisory
Committee,’’ because it addresses
responsibilities of the Supervisory
Committee when an FCU has no
remaining directors. Several other
bylaws refer to procedures by which
remaining directors can replace
directors who have been removed or
have resigned, but because this bylaw
addresses the situation where no
directors remain and the responsibility
falls upon the Supervisory Committee, it
is placed in Article IX.
The proposal also cross references
this new language in Article XVI,
Section 3, addressing removal of
directors by members, and Article VI,
Section 4, addressing board of director
vacancies. These new provisions do not
automatically become part of any FCU’s
existing bylaws and FCUs are not
required to adopt them. In the event a
credit union does not adopt the new
bylaw provisions, NCUA will continue
to follow the guidance expressed in its
prior legal opinion, cited above.
The NCUA Board has also considered
whether to allow more flexibility in the
Bylaws regarding the number of
members necessary to request a special
meeting as well as the timing for when
the meeting is held. NCUA’s position is
that any necessary changes in this area
for a particular credit union should be
handled through the bylaw amendment
process explained in the introduction to
the Bylaws.
NCUA is also adopting a minor
procedural change in an effort to
streamline the bylaw amendment
process even further. NCUA will
continue to post all bylaw amendment
opinion letters on its Web site. Bylaw
opinion letters issued since the last
major revision of the bylaws in April
2006 will now include the language for
any amendment approved, or a link to
that language. Credit unions seeking to
adopt a bylaw amendment using
identical language to a previously
approved amendment must still file the
proposed amendment with their
Regional Office, but will receive notice
of the Region’s action on their request
within 15 business days. Review of all
bylaw amendment requests ensures that
an amendment approved for one FCU is
appropriate for another FCU, but NCUA
believes this review can be
accomplished more quickly when the
requested amendment is identical to one
approved for another FCU.
Finally, the proposal includes a
revised introduction to reflect
incorporation of the Bylaws in NCUA
regulations. The introduction retains
language explaining how to adopt and
amend the bylaws as well as additional
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guidance. For bylaw amendments, the
introduction now states that FCUs
seeking a bylaw amendment identical to
a previously approved bylaw
amendment can expect an answer from
their Regional Office within 15 business
days of the receipt of the request.
C. Request for Comments
NCUA seeks comment on the
proposal to incorporate the Bylaws in
NCUA regulations. NCUA specifically
requests comments on the standards,
discussed above, for when it will
intervene in bylaw disputes, including
any other criteria NCUA should
consider in determining when it will
institute an enforcement action
regarding the bylaws. Also, NCUA
specifically requests comment on the
‘‘fundamental, material member rights’’
discussed above and whether any rights
should be added to or deleted from this
list. Finally, NCUA seeks comments on
the addition of the director succession
bylaw and the revised introduction.
Regulatory Procedures
Regulatory Flexibility Act
The Regulatory Flexibility Act
requires NCUA to prepare an analysis to
describe any significant economic
impact a rule may have on a substantial
number of small credit unions, defined
as those under ten million dollars in
assets. This proposed rule incorporates
the Bylaws into NCUA’s regulations
without imposing any regulatory
burden, since the FCU Act requires
FCUs to adopt NCUA-approved bylaws.
The proposed rule will not have a
significant economic impact on a
substantial number of small credit
unions, and, therefore, a regulatory
flexibility analysis is not required.
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Paperwork Reduction Act
NCUA has determined that the
proposed rule would not increase
paperwork requirements under the
Paperwork Reduction Act of 1995 and
regulations of the Office of Management
and Budget. 44 U.S.C. 3501 et seq.; 5
CFR part 1320.
Executive Order 13132
Executive Order 13132 encourages
independent regulatory agencies to
consider the impact of their actions on
state and local interests. In adherence to
fundamental federalism principles,
NCUA, an independent regulatory
agency as defined in 44 U.S.C. 3502(5),
voluntarily complies with the executive
order. The proposed rule would not
have substantial direct effects on the
states, on the connection between the
national government and the states, or
on the distribution of power and
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responsibilities among the various
levels of government. NCUA has
determined that this proposed rule does
not constitute a policy that has
federalism implications for purposes of
the executive order.
The Treasury and General Government
Appropriations Act, 1999—Assessment
of Federal Regulations and Policies on
Families
The NCUA has determined that the
proposed rule would not affect family
well-being within the meaning of
section 654 of the Treasury and General
Government Appropriations Act, 1999,
Public Law 105–277, 112 Stat. 2681
(1998).
List of Subjects in 12 CFR Part 701
Federal credit union bylaws.
By the National Credit Union
Administration Board on May 24, 2007.
Mary F. Rupp,
Secretary of the Board.
Accordingly, NCUA proposes to
amend 12 CFR part 701 by adding
§ 701.2 to read as follows:
PART 701—ORGANIZATION AND
OPERATION OF FEDERAL CREDIT
UNIONS
1. The authority citation for part 701
is amended to read as follows:
Authority: 12 U.S.C. 1752(5), 1755, 1756,
1757, 1758, 1759, 1761a, 1761b, 1766, 1767,
1782, 1784, 1786, 1787, 1789. Section 701.6
is also authorized by 15 U.S.C. 3717. Section
701.31 is also authorized by 15 U.S.C. 1601
et seq.; 42 U.S.C. 1981 and 3601–3610.
Section 701.35 is also authorized by 42
U.S.C. 4311–4312.
2. Part 701 is amended by adding
§ 701.2 to read as follows:
§ 701.2
Federal Credit Union Bylaws.
(a) Federal credit unions must operate
in accordance with their approved
bylaws. The Federal Credit Union
Bylaws and any amendments approved
for specific Federal Credit Unions are
hereby incorporated by reference
pursuant to 5 U.S.C. 552(a)(1) and
accompanying regulations. Federal
credit unions may adopt amendments to
their bylaws as provided in the bylaws,
with the approval of the Board.
(b) Copies of the Federal Credit Union
Bylaws may be obtained at https://
www.ncua.gov or by request addressed
to National Credit Union
Administration, 1775 Duke Street,
Alexandria, VA 22314.
(c) The National Credit Union
Administration may issue revisions or
amendments of the Federal Credit
Union Bylaws from time to time. An
historic file of amendments or revisions
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is maintained and made available for
inspection at the National Credit Union
Administration, 1775 Duke Street,
Alexandria, VA 22314.
(d) Copies of the Federal Credit Union
Bylaws are on file with the Director,
Office of the Federal Register, National
Archives and Records Service, General
Services Administration, Washington,
DC 20408. NCUA will file the text of
any changes in the Federal Credit Union
Bylaws with the Director, Office of the
Federal Register, and publish notice of
changes in the Federal Register.
Note: The text of the Federal Credit Union
Bylaws does not appear in the Code of
Federal Regulations.
3. The Federal Credit Union Bylaws
are revised as follows:
(a) Add the following paragraph at the
end of Section 3 of Article IX:
If all director positions become vacant
simultaneously, the supervisory
committee immediately becomes the
temporary board of directors. The
temporary board must call and hold a
special meeting to elect an interim
board at least 7 but no more than 14
days after all director positions become
vacant. Candidates for the interim board
at the special meeting may be
nominated by petition or from the floor.
The interim elected board serves until
the next annual meeting of members. If
the next annual meeting has been
scheduled and will occur within 45
days after all director positions become
vacant, the temporary board may not
call a special meeting to elect an interim
board and must serve until the annual
meeting.
If the next annual meeting has not
been scheduled, the temporary board
may not call a special meeting to elect
interim directors if the month and day
of the previous year’s meeting plus 7
days falls within 45 days after all
director positions become vacant. In this
case, the temporary board will call and
hold the next annual meeting within 7
days before or after the month and day
of the previous annual meeting and the
temporary board must serve until the
annual meeting. If an interim board is
elected and the annual meeting has not
been scheduled, the interim board must
schedule the annual meeting within 7
days before or after the month and day
of the previous annual meeting.
The supervisory committee acting as
the temporary board may not act on
policy matters. An interim board elected
under this section has the same powers
as a board elected under the credit
union’s regular election procedures and
may act on policy matters.
(b) Add the following sentence at the
end of Section 3 of Article XVI:
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If member votes at a special meeting
result in the removal of all directors, the
supervisory committee immediately
becomes the temporary board of
directors and must follow the
procedures in Article IX, Section 3.
(c) Insert the following sentence after
the first sentence of Section 4 of Article
VI:
If all director positions become vacant
simultaneously, the supervisory
committee immediately becomes the
temporary board of directors and must
follow the procedures in Article IX,
Section 3.
(d) Replace the sixth paragraph of the
introduction with the following:
Federal credit unions considering an
amendment may find it useful to review
the bylaws section of the agency Web
site, which includes Office of General
Counsel opinions about proposed bylaw
amendments. Opinions issued after
April 2006 will include the language of
approved amendments. Even if an
amendment has been previously
approved, the credit union must submit
a proposed amendment to NCUA for
review under the procedure listed above
to ensure the amendment is identical.
Credit unions requesting previously
approved amendments will receive
notice of the regional office’s decision
within 15 business days of the receipt
of the request.
(e) Replace the last paragraph of the
introduction with the following:
NCUA has discretion to take
administrative actions when a credit
union is not in compliance with its
bylaws. If a potential violation is
identified, NCUA will carefully
consider all of the facts and
circumstances in deciding whether to
take enforcement action. NCUA will not
take action against every minor or
technical violation, but emphasizes that
it retains discretion to enforce the
bylaws in appropriate cases, which may
include, but are not limited to, safety
and soundness concerns or threats to
fundamental, material credit union
member rights.
(f) Replace the first paragraph of the
introduction with the following:
Effective date: After consideration of
public comment, the National Credit
Union Administration (NCUA) Board
adopted these Bylaws and incorporated
them by reference in section 701.2 of
NCUA’s regulations on [date of final].
Unless a federal credit union has
adopted bylaws before [date of final] it
must adopt these revised Bylaws.
[FR Doc. E7–10389 Filed 6–4–07; 8:45 am]
BILLING CODE 7535–01–P
VerDate Aug<31>2005
15:43 Jun 04, 2007
Jkt 211001
NATIONAL CREDIT UNION
ADMINISTRATION
12 CFR Part 701
Chartering and Field of Membership
for Federal Credit Unions
National Credit Union
Administration (NCUA).
ACTION: Proposed rule.
AGENCY:
SUMMARY: The NCUA Board is
proposing amendments to its chartering
and field of membership manual to
update community chartering policies
in response to NCUA’s experience with
reviewing applications of credit unions
seeking community charters. These
changes include clarifying the
documentation requirements for a local
community and adding a public
comment procedure for certain types of
multiple political jurisdiction
community charter applications.
DATES: Comments must be postmarked
or received by August 6, 2007.
ADDRESSES: You may submit comments
by any of the following methods (Please
send comments by one method only):
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• NCUA Web Site: https://
www.ncua.gov/
RegulationsOpinionsLaws/
proposedregs/proposedregs.html.
Follow the instructions for submitting
comments.
• E-mail: Address to
regcomments@ncua.gov. Include ‘‘[Your
name] Comments on Proposed Rule
IRPS 07–1,’’ in the e-mail subject line.
• Fax: (703) 518–6319. Use the
subject line described above for e-mail.
• Mail: Address to Mary F. Rupp,
Secretary of the Board, National Credit
Union Administration, 1775 Duke
Street, Alexandria, Virginia 22314–
3428.
• Hand Delivery/Courier: Same as
mail address.
FOR FURTHER INFORMATION CONTACT:
Michael J. McKenna, Deputy General
Counsel; John K. Ianno, Senior Trial
Attorney; Frank Kressman, Staff
Attorney, Office of General Counsel, or
Robert Leonard, Program Officer, Office
of Examination and Insurance, 1775
Duke Street, Alexandria, Virginia 22314
or telephone (703) 518–6540 or (703)
518–6396.
SUPPLEMENTARY INFORMATION:
A. History
NCUA’s chartering and field of
membership policy is set out in NCUA’s
Chartering and Field of Membership
Manual (Chartering Manual),
PO 00000
Frm 00010
Fmt 4702
Sfmt 4702
Interpretive Ruling and Policy
Statement (IRPS) 03–1. 68 FR 18333
(Apr. 15, 2003). The policy is set forth
in IRPS 03–1 and implements credit
union field of membership law under
the Federal Credit Union Act. In 2006,
NCUA issued amendments to the
Chartering Manual chapter on
underserved areas. NCUA IRPS 06–1, 71
FR 36667 (Jun. 28, 2006).
The Board issued its last
comprehensive rulemaking regarding its
chartering policy in the spring of 2003.
68 FR 18333 (Apr. 15, 2003). Over the
past four years, NCUA’s Field of
Membership Taskforce has monitored
and reviewed the implementation of
IRPS 03–1 and its amendments in an
effort to improve consistency and
provide a basis for further clarifications
and modifications, if necessary. In
response to this continued oversight,
and requests from the NCUA Board,
staff has identified issues that need
clarification and are the basis for this
proposal.
B. Proposed Chartering Manual
Changes
Chapter 2 Field of Membership
Requirements for Community Credit
Unions: Section V—Community Charter
Requirements.
Background
In 1998 Congress passed the Credit
Union Membership Access Act
(‘‘CUMAA’’) and reiterated its
longstanding support for credit unions,
noting that they ‘‘have the specif[ic]
mission of meeting the credit and
savings needs of consumers, especially
persons of modest means.’’ Public Law
105–219, section 2, 112 Stat. 913
(August 7, 1998). The Federal Credit
Union Act (‘‘FCUA’’) grants the NCUA
Board broad general rulemaking
authority over federal credit unions. 12
U.S.C. 1766(a). In passing CUMAA
Congress amended the FCUA and
specifically delegated to the Board the
authority to define by regulation the
meaning of a ‘‘well-defined local
community’’ for federal credit union
community charters. 12 U.S.C. 1759(g).
In developing a working regulatory
definition of a local community the
Board has been mindful of the statutory
language as well as its important
responsibility to ensure that it charters
safe and sound credit unions that can
provide a broad range of financial
services to as many people in the
community as possible.
Since 2000 there has been significant
growth in the number of credit unions
with community charters. The majority
of these have come from conversions of
credit unions with single and multiple
E:\FR\FM\05JNP1.SGM
05JNP1
]]>Agencies
[Federal Register Volume 72, Number 107 (Tuesday, June 5, 2007)]
[Proposed Rules]
[Pages 30984-30988]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-10389]
=======================================================================
-----------------------------------------------------------------------
NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 701
Federal Credit Union Bylaws
AGENCY: National Credit Union Administration (NCUA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: NCUA is proposing to reincorporate the Federal Credit Union
(FCU) Bylaws into NCUA regulations. This change clarifies NCUA's
ability to use a range of enforcement authorities, in appropriate
cases, to enforce the FCU Bylaws. In addition, NCUA is adding a bylaw
provision on director succession, an issue it has previously addressed
in legal opinions, and is revising the introduction to the Bylaws to
conform it to these changes.
DATES: Comments must be received by August 6, 2007.
ADDRESSES: You may submit comments by any of the following methods
(Please send comments by one method only):
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
NCUA Web Site: https://www.ncua.gov/
RegulationsOpinionsLaws/proposed_regs/proposed_regs.html. Follow the
instructions for submitting comments.
E-mail: Address to regcomments@ncua.gov. Include ``[Your
name] Comments on FCU Bylaws'' in the e-mail subject line.
Fax: (703) 518-6319. Use the subject line described above
for e-mail.
Mail: Address to Mary Rupp, Secretary of the Board,
National Credit Union Administration, 1775 Duke Street, Alexandria,
Virginia 22314-3428.
Hand Delivery/Courier: Same as mail address.
Public inspection: All public comments are available on the
agency's Web site at https://www.ncua.gov/RegulationsOpinionsLaws/
comments as submitted, except as may not be possible for technical
reasons. Public comments will not be edited to remove any identifying
or contact information. Paper copies of comments may be inspected in
NCUA's law library, at 1775 Duke Street, Alexandria, Virginia 22314, by
appointment weekdays between 9 a.m. and 3 p.m. To make an appointment,
call (703) 518-6546 or send an e-mail to OGC Mail @ncua.gov.
FOR FURTHER INFORMATION CONTACT: Elizabeth Wirick, Staff Attorney,
Office of General Counsel, National Credit Union Administration, 1775
Duke Street, Alexandria, Virginia 22314-3428 or telephone: (703) 518-
6540.
SUPPLEMENTARY INFORMATION:
A. Background
The Federal Credit Union Act (the Act) requires the NCUA Board to
prepare bylaws that ``shall be used'' by FCUs and authorizes NCUA to
enforce FCU Bylaws through charter suspension and liquidation. 12
U.S.C. 1758, 1766. Until 1982, the FCU Bylaws were incorporated by
reference in NCUA's regulations. NCUA's authority to enforce bylaw
violations through less severe administrative remedies then was clear
because such violations could be viewed as a violation of NCUA's
regulations, thus enabling NCUA to bring a variety of administrative
enforcement actions to effect compliance in appropriate cases.
In 1982, the Bylaws were removed from the regulations as part of a
general deregulatory effort. At that time, three separate sections of
NCUA regulations incorporated the FCU Bylaws by reference. 12 CFR
701.2, 701.3, 701.14 (1982). Another section required NCUA approval of
any bylaw amendments. 12 CFR 701.4 (1982). NCUA deleted two of the
sections incorporating the Bylaws by reference, as well as the
regulation requiring NCUA approval of amendments, in two final rules
issued in 1982. 47 FR 23685 (June 1, 1982); 47 FR 46249 (Oct. 18,
1982).
These rules were one result of a comprehensive review of agency
regulations NCUA undertook in the early 1980s in an effort to eliminate
redundant or outdated requirements. The goal of this process was to
reduce the number and complexity of NCUA regulations and delete
guidance found in other publications. 47 FR 46249 (Oct. 18, 1982). The
Bylaws were only one of several items deleted from incorporation by
reference in the 1982 rules cited above. One of the rules also deleted
the NCUA Accounting Manual and Data Processing Guidelines from
incorporation by reference. 47 FR 23685 (June 1, 1982). The other also
deleted references to chartering procedures contained elsewhere in NCUA
guidance.
[[Page 30985]]
47 FR 46249 (Oct. 18, 1982). The discussions in the proposed and final
rules and at the NCUA Board meetings focus on the other provisions in
the rules, with very little information about the Bylaws. Id.; 47 FR
23750 (June 1, 1982); 47 FR 23686 (June 1, 1982); 46 FR 48940 (Oct. 5,
1981); Recordings of NCUA Board Meetings Sept. 24, 1981; May 20, 1982
and Sept. 23, 1982. The sole comment about the Bylaws available in the
administrative record is in the preamble to one of the final rules, and
it states: ``The commenters also were in agreement with NCUA's
deregulation of charter and bylaw provisions and condensation of
chartering procedures.'' 47 FR at 46249.
The Board's 1982 actions resulted in the retention of one section
incorporating the Bylaws by reference, Sec. 701.2, which was not
deleted until 1999. 12 CFR 701.2 (1982-1999). Although one of the 1982
rules deleted other publications incorporated by reference in Sec.
701.2, while leaving the reference to the Bylaws intact, the proposed
and final rules do not explain this action. 47 FR 23685 (June 1, 1982);
46 FR 48490 (Sept. 24, 1981). NCUA deleted Sec. 701.2 as a technical
amendment in 1999. 64 FR 57363 (Oct. 25, 1999). After reviewing the
entire record, retention of the incorporation of the bylaws in Sec.
701.2 appears to have been an oversight.
When the Bylaws were deregulated in 1982, the rule changes did not
address the issue of whether the agency would enforce the Bylaws or
intervene in disputes concerning the Bylaws. NCUA's policy not to
become involved in bylaw disputes unless the bylaw violation threatens
the safety and soundness of the credit union or violates a provision of
the FCU Act or NCUA regulations evolved in various issuances and
procedures after 1982. Numerous legal opinion letters state this
policy, as well as NCUA's position that the Bylaws represented a
contract between a credit union and its members. NCUA's view was that
state corporate law, if consistent with the Act and NCUA regulations,
determined disputes regarding the enforcement of bylaw provisions. As a
result of the deregulation of the bylaws, NCUA's ability to enforce the
Bylaws, absent a safety and soundness reason, has become problematic.
NCUA's post-deregulatory policy has sometimes had the effect of
requiring FCU members to resort to state court action in order to force
their credit union to abide by its bylaws. While this approach worked
fairly well for the most part over the years, recently, NCUA has
learned of cases where members have been unable to use the judicial
system to enforce rights granted by the Bylaws. While NCUA continues to
maintain members can enforce the bylaws as a contract, the Board
recognizes that, in certain circumstances, this remedy may not be
practical or provide adequate relief due to circumstances such as
timing and cost.
As the administrative record demonstrates, the Board did not
foresee the current challenges members can face in seeking to enforce
the bylaws when it deregulated the Bylaws in 1982 in an effort to
eliminate redundancy and maximize flexibility for FCUs. At this time,
the Board finds reincorporating the bylaws into NCUA's regulations is
an appropriate step. Reincorporation is the least burdensome way to
ensure FCUs and their members are aware of NCUA's authority to issue
and enforce the Bylaws under the Act.
Congress has provided the Board explicit authority in the Act to
suspend or revoke the charter of any FCU, or place the FCU into
involuntary liquidation, for a violation of any provision of its
bylaws. 12 U.S.C. 1766(b)(1). A charter suspension or liquidation,
however, is a very extreme remedy and is unlikely to be an appropriate
remedy for any bylaw violation. The resultant loss of credit union
service would likely result in far more harm to members than the FCU's
failure to follow its bylaws.
NCUA believes the better approach is to reincorporate the Bylaws
into NCUA's regulations. The Board believes credit unions and their
members should be able to resolve bylaw disputes without NCUA taking
administrative action. In those rare cases where disputes cannot be
resolved, NCUA will have clear authority to use a range of
administrative actions. This will result in administrative remedies far
less harsh than a charter suspension or liquidation to effect a credit
union's compliance with its bylaws.
Reincorporating the Bylaws into NCUA's regulations imposes no new
regulatory burden, as all FCUs are already required to have NCUA-
approved bylaws. NCUA publishes form bylaw language and all FCUs have
adopted some version of the form language. The latest version of the
Bylaws allows FCUs flexibility wherever possible by providing check-off
or fill-in-the-blank options that can be adopted without further NCUA
action. NCUA's regional directors must approve all other bylaw
amendments. NCUA will approve all proposed bylaw amendments that do not
conflict with the Act or NCUA regulation and guidance, present a
potential safety and soundness threat, or restrict members' rights.
NCUA does not maintain copies of each FCU's bylaws and bylaw
amendments.
In considering reincorporation, the Board again thought about
whether it should continue to prescribe model bylaw language or whether
it should, as suggested by several commenters during the 2006 Bylaw
revision process, prescribe only general categories and allow FCUs to
draft their own bylaws. The Board's concerns with this approach remain
the potential for confusion and the adoption of illegal bylaw
provisions. While some previous commenters suggested a categories-style
rule, others, including credit union employees and credit union legal
representatives, have indicated that having form Bylaws is an aid and
is not overly burdensome. Credit union staff members and boards of
directors know that the Bylaws are a condensation of some requirements
in the Act, NCUA regulations, and NCUA guidance. For most, the option
to draft bylaws completely on their own is unattractive because of the
amount of research required to ensure inclusion of all necessary
provisions. Also, presumably, NCUA would have to adopt some oversight
mechanism to prevent adoption of bylaw provisions that are inconsistent
with statutory and regulatory requirements or present safety and
soundness concerns. Because NCUA does not now maintain copies of
individual FCU bylaws or review bylaws in examinations as a matter of
course, having a category-type regulation would likely result in more
regulation, not less.
The Board also considered modeling its bylaw regulation on the
approach used by the Office of Thrift Supervision (OTS). The OTS has
detailed regulations listing required bylaw provisions and also
provides model bylaw language separately. 12 CFR 544.5, 552.5; OTS
Applications Handbook, Forms 1577, 1508. The model language is mostly a
restatement of the regulation. Id. Thrifts are not required to adopt
the model language exactly, and, like FCUs, may also adopt certain
optional provisions. All amendments, including the model option
provisions, must be filed with OTS. 12 CFR 544.5(d), 552.6(c). The
result of the OTS approach is similar to NCUA's. Both federal thrifts
and FCUs have form bylaw language. Although the regulation permits
thrifts to adopt their own language rather than the model, drafting
bylaws that comply with the requirements of the regulation results in
bylaws nearly indistinguishable from the form bylaws. Both federal
thrifts and
[[Page 30986]]
FCUs are allowed to select certain options without further agency
action, but thrifts must file all amendments with OTS. After
considering the OTS approach, the Board continues to believe that
incorporating the Bylaws by reference into NCUA's regulations is the
most expeditious and least burdensome approach.
The proposed rule will give NCUA authority to enforce bylaw
violations in certain, limited cases through administrative tools in
the Act. Incorporating the FCU Bylaws into NCUA's regulations will not
mean NCUA will become involved as a matter of course in bylaw disputes.
The Board believes credit union officials and members should be able to
work together to resolve the vast majority of bylaw and internal
governance disputes. This was true before 1982 when the Bylaws were
incorporated by reference in NCUA's regulations and, as was the case
then, NCUA has no intention of using agency resources to enforce every
bylaw violation. Furthermore, under the risk-based examination system
in use for FCUs, examiners do not currently, nor will they under this
proposed rule, inquire into an FCU's bylaws unless the FCU's management
raises the issue.
A credit union's management, however, should not be able to ignore
the Bylaws unilaterally. Members have a reasonable expectation that
their credit union will be operated in accordance with its approved
bylaws. NCUA already has the authority to exercise its administrative
enforcement authority when a credit union violates the Act or NCUA
regulations or a threat to the safety and soundness of the institution
exists. NCUA also believes it should have the ability to institute an
enforcement action when a bylaw violation poses a threat to
fundamental, material credit union member rights. These rights are
those that go to the very heart of the cooperative principles that
serve as the cornerstone of the credit union system. Specifically, they
include the right to:
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.
It continues to be NCUA's intent that credit unions and their
members will make every effort to resolve bylaw disputes without NCUA
intervention. If a bylaw dispute cannot be resolved, however, credit
union officials or members should contact the regional office with
jurisdiction for the FCU. Regional offices have substantial experience
in reviewing and working with credit unions on bylaw disputes, as well
as proposed bylaw amendments. The regional offices have historically
assisted credit union officials and members in resolving bylaw and
internal governance disputes. However, if a matter involves
fundamental, material credit union member rights, NCUA will have clear
discretion to take administrative action as warranted. The Board
believes this is preferable to requiring credit unions and their
members to resort to the state courts, with the attendant expense, time
delays and uncertainty regarding bylaw enforceability.
B. Specific Changes to the FCU Bylaws
NCUA issued an updated and revised version of the FCU Bylaws in
2006. 71 FR 24551 (April 26, 2006). Because the revised Bylaws were
issued so recently, NCUA believes another major review is unnecessary
at this time. The Board believes, however, this rulemaking presents an
appropriate opportunity to address one particular circumstance
previously only addressed in legal opinions, namely, the responsibility
of the Supervisory Committee to assume the responsibilities of the
board of directors temporarily if, for any reason, an entire board of
directors is simultaneously removed or unable to serve. See OGC Opinion
06-0446 (April 27, 2006). This proposed rule adds new provisions to the
Bylaws clarifying responsibilities and procedures if, for any reason,
including removal or other inability to serve, an FCU has no remaining
directors. This proposed rule also revises the introduction to the
Bylaws to reflect the reincorporation of the Bylaws in the regulations.
The proposal adds a new Section to Article IX to clarify the
Supervisory Committee's responsibilities if an FCU has no remaining
directors. If an entire board of directors resigns, is removed
simultaneously, or for whatever circumstance is unable to serve, the
Supervisory Committee has the responsibility to act as a temporary
board of directors. As has been previously stated in NCUA legal
opinions, the FCU Bylaws will now provide that, as the temporary board
of directors, the Supervisory Committee must either schedule a special
meeting to elect an interim board, or, if the credit union's next
annual meeting of members will occur within 45 days after the FCU loses
its directors, must serve as the temporary board until the next annual
meeting.
NCUA believes this provision belongs in Article IX, entitled
``Supervisory Committee,'' because it addresses responsibilities of the
Supervisory Committee when an FCU has no remaining directors. Several
other bylaws refer to procedures by which remaining directors can
replace directors who have been removed or have resigned, but because
this bylaw addresses the situation where no directors remain and the
responsibility falls upon the Supervisory Committee, it is placed in
Article IX.
The proposal also cross references this new language in Article
XVI, Section 3, addressing removal of directors by members, and Article
VI, Section 4, addressing board of director vacancies. These new
provisions do not automatically become part of any FCU's existing
bylaws and FCUs are not required to adopt them. In the event a credit
union does not adopt the new bylaw provisions, NCUA will continue to
follow the guidance expressed in its prior legal opinion, cited above.
The NCUA Board has also considered whether to allow more
flexibility in the Bylaws regarding the number of members necessary to
request a special meeting as well as the timing for when the meeting is
held. NCUA's position is that any necessary changes in this area for a
particular credit union should be handled through the bylaw amendment
process explained in the introduction to the Bylaws.
NCUA is also adopting a minor procedural change in an effort to
streamline the bylaw amendment process even further. NCUA will continue
to post all bylaw amendment opinion letters on its Web site. Bylaw
opinion letters issued since the last major revision of the bylaws in
April 2006 will now include the language for any amendment approved, or
a link to that language. Credit unions seeking to adopt a bylaw
amendment using identical language to a previously approved amendment
must still file the proposed amendment with their Regional Office, but
will receive notice of the Region's action on their request within 15
business days. Review of all bylaw amendment requests ensures that an
amendment approved for one FCU is appropriate for another FCU, but NCUA
believes this review can be accomplished more quickly when the
requested amendment is identical to one approved for another FCU.
Finally, the proposal includes a revised introduction to reflect
incorporation of the Bylaws in NCUA regulations. The introduction
retains language explaining how to adopt and amend the bylaws as well
as additional
[[Page 30987]]
guidance. For bylaw amendments, the introduction now states that FCUs
seeking a bylaw amendment identical to a previously approved bylaw
amendment can expect an answer from their Regional Office within 15
business days of the receipt of the request.
C. Request for Comments
NCUA seeks comment on the proposal to incorporate the Bylaws in
NCUA regulations. NCUA specifically requests comments on the standards,
discussed above, for when it will intervene in bylaw disputes,
including any other criteria NCUA should consider in determining when
it will institute an enforcement action regarding the bylaws. Also,
NCUA specifically requests comment on the ``fundamental, material
member rights'' discussed above and whether any rights should be added
to or deleted from this list. Finally, NCUA seeks comments on the
addition of the director succession bylaw and the revised introduction.
Regulatory Procedures
Regulatory Flexibility Act
The Regulatory Flexibility Act requires NCUA to prepare an analysis
to describe any significant economic impact a rule may have on a
substantial number of small credit unions, defined as those under ten
million dollars in assets. This proposed rule incorporates the Bylaws
into NCUA's regulations without imposing any regulatory burden, since
the FCU Act requires FCUs to adopt NCUA-approved bylaws. The proposed
rule will not have a significant economic impact on a substantial
number of small credit unions, and, therefore, a regulatory flexibility
analysis is not required.
Paperwork Reduction Act
NCUA has determined that the proposed rule would not increase
paperwork requirements under the Paperwork Reduction Act of 1995 and
regulations of the Office of Management and Budget. 44 U.S.C. 3501 et
seq.; 5 CFR part 1320.
Executive Order 13132
Executive Order 13132 encourages independent regulatory agencies to
consider the impact of their actions on state and local interests. In
adherence to fundamental federalism principles, NCUA, an independent
regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies
with the executive order. The proposed rule would not have substantial
direct effects on the states, on the connection between the national
government and the states, or on the distribution of power and
responsibilities among the various levels of government. NCUA has
determined that this proposed rule does not constitute a policy that
has federalism implications for purposes of the executive order.
The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families
The NCUA has determined that the proposed rule would not affect
family well-being within the meaning of section 654 of the Treasury and
General Government Appropriations Act, 1999, Public Law 105-277, 112
Stat. 2681 (1998).
List of Subjects in 12 CFR Part 701
Federal credit union bylaws.
By the National Credit Union Administration Board on May 24,
2007.
Mary F. Rupp,
Secretary of the Board.
Accordingly, NCUA proposes to amend 12 CFR part 701 by adding Sec.
701.2 to read as follows:
PART 701--ORGANIZATION AND OPERATION OF FEDERAL CREDIT UNIONS
1. The authority citation for part 701 is amended to read as
follows:
Authority: 12 U.S.C. 1752(5), 1755, 1756, 1757, 1758, 1759,
1761a, 1761b, 1766, 1767, 1782, 1784, 1786, 1787, 1789. Section
701.6 is also authorized by 15 U.S.C. 3717. Section 701.31 is also
authorized by 15 U.S.C. 1601 et seq.; 42 U.S.C. 1981 and 3601-3610.
Section 701.35 is also authorized by 42 U.S.C. 4311-4312.
2. Part 701 is amended by adding Sec. 701.2 to read as follows:
Sec. 701.2 Federal Credit Union Bylaws.
(a) Federal credit unions must operate in accordance with their
approved bylaws. The Federal Credit Union Bylaws and any amendments
approved for specific Federal Credit Unions are hereby incorporated by
reference pursuant to 5 U.S.C. 552(a)(1) and accompanying regulations.
Federal credit unions may adopt amendments to their bylaws as provided
in the bylaws, with the approval of the Board.
(b) Copies of the Federal Credit Union Bylaws may be obtained at
https://www.ncua.gov or by request addressed to National Credit Union
Administration, 1775 Duke Street, Alexandria, VA 22314.
(c) The National Credit Union Administration may issue revisions or
amendments of the Federal Credit Union Bylaws from time to time. An
historic file of amendments or revisions is maintained and made
available for inspection at the National Credit Union Administration,
1775 Duke Street, Alexandria, VA 22314.
(d) Copies of the Federal Credit Union Bylaws are on file with the
Director, Office of the Federal Register, National Archives and Records
Service, General Services Administration, Washington, DC 20408. NCUA
will file the text of any changes in the Federal Credit Union Bylaws
with the Director, Office of the Federal Register, and publish notice
of changes in the Federal Register.
Note: The text of the Federal Credit Union Bylaws does not
appear in the Code of Federal Regulations.
3. The Federal Credit Union Bylaws are revised as follows:
(a) Add the following paragraph at the end of Section 3 of Article
IX:
If all director positions become vacant simultaneously, the
supervisory committee immediately becomes the temporary board of
directors. The temporary board must call and hold a special meeting to
elect an interim board at least 7 but no more than 14 days after all
director positions become vacant. Candidates for the interim board at
the special meeting may be nominated by petition or from the floor. The
interim elected board serves until the next annual meeting of members.
If the next annual meeting has been scheduled and will occur within 45
days after all director positions become vacant, the temporary board
may not call a special meeting to elect an interim board and must serve
until the annual meeting.
If the next annual meeting has not been scheduled, the temporary
board may not call a special meeting to elect interim directors if the
month and day of the previous year's meeting plus 7 days falls within
45 days after all director positions become vacant. In this case, the
temporary board will call and hold the next annual meeting within 7
days before or after the month and day of the previous annual meeting
and the temporary board must serve until the annual meeting. If an
interim board is elected and the annual meeting has not been scheduled,
the interim board must schedule the annual meeting within 7 days before
or after the month and day of the previous annual meeting.
The supervisory committee acting as the temporary board may not act
on policy matters. An interim board elected under this section has the
same powers as a board elected under the credit union's regular
election procedures and may act on policy matters.
(b) Add the following sentence at the end of Section 3 of Article
XVI:
[[Page 30988]]
If member votes at a special meeting result in the removal of all
directors, the supervisory committee immediately becomes the temporary
board of directors and must follow the procedures in Article IX,
Section 3.
(c) Insert the following sentence after the first sentence of
Section 4 of Article VI:
If all director positions become vacant simultaneously, the
supervisory committee immediately becomes the temporary board of
directors and must follow the procedures in Article IX, Section 3.
(d) Replace the sixth paragraph of the introduction with the
following:
Federal credit unions considering an amendment may find it useful
to review the bylaws section of the agency Web site, which includes
Office of General Counsel opinions about proposed bylaw amendments.
Opinions issued after April 2006 will include the language of approved
amendments. Even if an amendment has been previously approved, the
credit union must submit a proposed amendment to NCUA for review under
the procedure listed above to ensure the amendment is identical. Credit
unions requesting previously approved amendments will receive notice of
the regional office's decision within 15 business days of the receipt
of the request.
(e) Replace the last paragraph of the introduction with the
following:
NCUA has discretion to take administrative actions when a credit
union is not in compliance with its bylaws. If a potential violation is
identified, NCUA will carefully consider all of the facts and
circumstances in deciding whether to take enforcement action. NCUA will
not take action against every minor or technical violation, but
emphasizes that it retains discretion to enforce the bylaws in
appropriate cases, which may include, but are not limited to, safety
and soundness concerns or threats to fundamental, material credit union
member rights.
(f) Replace the first paragraph of the introduction with the
following:
Effective date: After consideration of public comment, the National
Credit Union Administration (NCUA) Board adopted these Bylaws and
incorporated them by reference in section 701.2 of NCUA's regulations
on [date of final]. Unless a federal credit union has adopted bylaws
before [date of final] it must adopt these revised Bylaws.
[FR Doc. E7-10389 Filed 6-4-07; 8:45 am]
BILLING CODE 7535-01-P
