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NCUA Offers Meeting and Election Guidance for Credit Unions Affected by Hurricane Katrina

Flexible Options Exist for Board Meetings and Officer Elections

Alexandria, Va., December 14, 2005 -- The National Credit Union Administration (NCUA) Office of General Counsel (OGC) today issued Opinion Letter 05-1216 providing guidance and detailing the flexible procedures in place for conducting board meetings and member elections in response to concerns expressed by federal credit unions (FCU) affected by Hurricane Katrina.

The relevant Federal Credit Union Bylaw provisions and NCUA Office of General Counsel (OGC) opinions attached to the letter provide the specifics of authorized flexibility for federal credit union board and member meetings and for election procedures.

Board meetings
Standard FCU bylaws require only one face-to-face board of directors meeting per year. Other meetings may be conducted by video or teleconference. The one in-person meeting requires the actual presence of a quorum of directors, not every director. Absent directors may also participate by video or teleconference. Credit union boards may act without a meeting, if the vote is unanimous and each board member’s position is documented in writing or email.

Also, standard FCU bylaws permit directors to appoint temporary directors and supervisory and credit committee members to serve in place of those who may need to step aside.

Notice of member meetings and elections
Affected credit unions should follow usual procedures and send information about meetings and elections to member’s last recorded address. Members are responsible for notifying the credit union of address changes. While some addresses may no longer exist, members may have provided mail forwarding instructions.

There are four options for conducting elections, and if a credit union’s board or management feels that a different option would be more convenient, they may amend the credit union’s bylaws with a vote by two-thirds of the directors.

An FCU may also delay its annual member meeting for a few months. While an FCU is required to conduct an annual meeting and hold elections, there is nothing in the FCU Act or FCU Bylaws to prohibit a change in the date of the annual meeting.

Proxy voting
The FCU bylaws prohibit proxy voting by credit union members. However, credit union boards may act without a meeting as long as all directors vote and the vote is unanimous and in writing, which can be by email.

GC Opinion Letter 05-1216 is available online at http://www.ncua.gov/RegulationsOpinionsLaws/opinion_letters/opinion_letters.html.

The National Credit Union Administration charters and supervises federal credit unions. NCUA, with the backing of the full faith and credit of the U.S. government, operates and manages the National Credit Union Share Insurance Fund, insuring the accounts of 84.5 million account holders in all federal credit unions and the majority of state-chartered credit unions.