Compliance Blog

Apr 28, 2011
Categories: Board and Governance

Research Tip: Bylaws; Shameless Plug for Supervisory Committees

Posted by Anthony Demangone

I cannot tell you exactly how many times I researched bylaw issues this year, but it has been a bunch.  A federal credit union's bylaws touch upon so many important issues:

  • Expulsion and limitation of services
  • Elections
  • Par value requirements for members
  • How a credit union sets up its lending program
  • Training issues
  • Indemnification issues

I could go on, but I think you get the point.  With that in mind, here are a few things you should have handy.

  1. A fresh copy of your FCU's bylaws.  You should have a hard copy near your desk or an electronic version saved to your computer.  NCUA allows a good deal of variety when it comes to bylaws.  A FCU is not required to adopt new provisions when NCUA issues a new set of standard bylaws, so you'll have to research your own set to get a definite answer for a given issue.
  2. Familiarize yourself with NCUA's federal credit union bylaws web page.   This will have links to some of the more recent versions of NCUA's "model" or "standard" bylaws. 
  3. There are also a good deal of bylaw amendment opinions located here.  If you search NCUA's website and select "legal opinion," these don't seem to pop up for some reason.  So it may be worth your time to review this area when researching a bylaws issue.
  4. Finally, don't forget to research the issue searching through NCUA's legal opinion letters. 

Supervisory Committees.  Every credit union has a supervisory committee, but you don't hear a bunch about this important part of a credit union's corporate structure.  When NCUA issued its fiduciary duties rule, the fiduciary duties portion of the rule strangely didn't address duties for supervisory committee members.  When researching issues related to this committee, the Holy Grail continues to be NCUA's Supervisory Committee Guide.   Do your credit union a favor: Give every member of your credit union's supervisory committee a copy of this guide.  Print it out and give it to them in a binder.  In addition, you might want to send them the link to the guide that I provided in this blog post. 

 Shameless plug

Speaking of Supervisory Committee Members.   I always thought NAFCU could do more for supervisory committee members in the area of education.  Well, we finally devoted a large chunk of education time and resources for this important committee in this year's NAFCU Annual Conference.  You may want to forward this post to your supervisory committee members and have them review the educational sessions designed just for them.