Dear Mr. Hiller:
You asked a number of questions regarding petition requirements. Specifically, you requested clarification on the requirements and format for member signatures on a petition and the definition of a federal credit union (FCU) member. Our answers to your questions are provided below.1. For the purposes of a member petition, is it sufficient for FCU members to indicate their support by providing their printed name along with their signature or may the FCU require additional identifying information, such as account number, social security number, address, and phone number, etc.
Generally, a member petition must include sufficient information to verify member support for the petition request. In a 2006 legal opinion, our office provided guidelines on verification of member support. See OGC Op. 06-0326 (Mar. 28, 2006). The 2006 letter stated a petition must include the member’s name in legible type or handwriting, accompanied by sufficient identifying information to enable the credit union to verify the membership status of the petitioners and prevent the listing of members without authorization. A petition should include some additional information about the petitioner so an FCU can confirm the member’s identity. What additional information will suffice depends on how member support is solicited (i.e., in person or by electronic means). For example, if organizers of a petition solicit hard-copy script or “wet” signatures, information such as a telephone number or address or the last four digits of a social security number is likely sufficient. Hard copy signatures on a petition can also be compared to those on FCU account signature cards. For petitions solicited electronically, use of some personal identifier, such as the last four digits of a member’s social security number, is important given the technological difficulty of obtaining a script signature electronically. Due to privacy considerations, however, an FCU should not require members to disclose their account numbers or full social security numbers as a means of verifying identity. Id.; see also OGC Op. 03-0106 (Feb. 6, 2003).2. For a petition for an FCU member to have his or her name placed in nomination for a seat on the Board of Directors, is it permissible to have multiple nominees named on a single petition or must each nominee have an individual petition?
For practical purposes, we believe each nominee should be named on an individual petition so it is clear which members are supporting which nominee. Separate petitions would also help the FCU to verify that the nominee has obtained the requisite number of member signatures to meet the nomination requirement.3. Is it permissible to solicit signatures for a petition on credit union property even if the credit union has an official or unofficial no-solicitation policy?
This issue is not addressed by the FCU Act or NCUA’s regulation; therefore, it is in the FCU’s discretion to establish a policy regarding petition solicitation on credit union premises. Nevertheless, NCUA encourages FCUs to permit petition solicitations that do not pose any safety or security hazards. We believe FCUs can establish policies for a controlled procedure for petition solicitation on its premises. OGC Op. 95-0328 (April 5, 1995).4. For the purposes of verifying a petitioner’s membership, how is FCU membership determined in the following cases: a. For a joint account?
An individual may be a joint owner of an account without also being a member of the FCU. In other words, a joint owner of a FCU account may or may not be an FCU member. The difference between a “joint owner” and a “joint member” is a member has the right to obtain a loan, vote, and run for FCU office, while a joint owner is not a member and does not have any of those rights. OGC Op. 92-0643 (July 8, 1992). For an individual to have FCU membership rights, including the right to sign a member petition, he or she must be within the FCU’s field of membership, complete a membership application, purchase one share of stock, and pay any applicable entrance fee. 12 U.S.C. §1759. A separate individual account for each joint member is not needed; however, for both joint account owners to qualify for membership, each must maintain at least one share of stock in the account. OGC Op. 94-0632 (July 13, 1994). If each joint account owner has met the FCU membership requirements, each owner will be entitled to sign a membership petition.b. For a child’s account?
Minors are permitted to own shares in an FCU. FCU Bylaws, Art. XV, Sec. 1. However, even if minors are members of an FCU, they are not afforded the same privileges of membership as adult members. OGC Op. 99-0212 (May 25, 1999). The FCU Bylaws provide a minimum age to vote, hold office, or sign petitions; each FCU establishes its own minimum age, not to exceed 18 years old, or the age of majority under state law. See FCU Bylaws, Art.V, Sec. 7. If a minor accountholder meets the FCU’s membership requirements and the minimum age requirement established in the FCU’s bylaws, the child is entitled to sign a member petition.c. For a business account?
A member other than a natural person, such as a business, may vote through an agent designated in writing for that purpose. FCU Bylaws, Art. V, Sec. 4. The designated agent would also have authority to sign a member petition as agent for the business.d. For a custodial account?
FCU’s may establish custodial accounts if either the custodian establishing the account or the minor-beneficiary is a member of the FCU. In other words, a custodian need not be a member of the FCU to be entitled to establish and maintain a custodial account on behalf of a minor if the minor qualifies for membership. For the purposes of verifying a petitioner’s membership, however, a custodian may sign a petition on a minor-beneficiary’s behalf if the minor meets the FCU’s membership requirements and the minimum age requirement established in the FCU’s bylaws. Under these circumstances, the custodian petitioner would be acting on the minor’s behalf; thus, the custodian would not be entitled to sign the petition twice for the custodial account (i.e., once as custodian and once on behalf of the minor-beneficiary).e. For an IRA account?
In the case of an IRA account, the beneficiaries of the account who are also FCU members are entitled to sign a petition.
In general, a member can only sign a petition once (in one’s capacity as a member) regardless of the number of accounts held.
If you have any questions, please contact Staff Attorney Pamela Yu or me.
Hattie M. Ulan
Associate General Counsel