How The Federal Credit Union Regulator - NCUA - Views Election Procedures and Bylaws

Credit Unions in the United States are chartered (licensed to operate) by either the National Credit Union Administration (NCUA), which issues federal charters, or by individual state governments (in North Carolina, by the Credit Union Division within the N.C. Department of Commerce). 

There are currently 4,700 federally-chartered credit unions across the U.S. and 31 North Carolina state-chartered credit unions. NCUA also administers the federal deposit insurance program (similar to the FDIC for banks) for all credit unions; so both the federal and state regulators work closely together, regardless of charter type.

Here's what the NCUA says about the importance of the bylaws of a credit union:

 ✅ The Nature of the FCU Bylaws [from NCUA website]

1. The Federal Credit Union Act requires the NCUA Board to prepare bylaws for federal credit unions. 

2. The FCU Bylaws address a broad range of matters concerning a credit union’s organization and governance, the relationship of the credit union to its members, and the procedures and rules a credit union follows. The FCU Bylaws supplement the broad provisions of:

 • A federal credit union’s charter, which establishes the existence of a federal credit union;

 • The Federal Credit Union Act, which establishes the powers of federal credit unions; and 

• The NCUA’s regulations, which implement the Federal Credit Union Act.  

As a legal matter, a federal credit union’s bylaws must conform to, and cannot be inconsistent with, any provision of its charter, the Federal Credit Union Act, the NCUA’s regulations, or other laws or regulations applicable to the credit union’s operations. 

The NCUA has discretion to take administrative actions when a credit union is not in compliance with its bylaws. If a potential violation is identified, the NCUA will carefully consider all of the facts and circumstances in deciding whether to take enforcement action. 

The NCUA will not generally take action against .minor or technical violations, but emphasizes that it retains discretion to enforce the FCU Bylaws in appropriate cases, such as safety and soundness concerns or threats to fundamental, material credit union member rights.

❗ It is simply illegal for the SECU Board of Directors to exclude any SECU member, who is 18 years old and willing to serve, from independently petitioning to become a candidate for the SECU Board of Directors.

✅  The Administrator of N.C. Credit Unions possesses the same rights and discretion to enforce compliance by state-chartered credit unions with North Carolina law, rules & regs, and bylaws. 

 

  ... and regardless of what some folks think (kinda like publishing monthly financial statements), compliance isn't optional!

 

SECU Election Cycle - "This Board" Has Stacked The Deck - Why Are They Afraid of The MembershIp?

SECU "This" Board's New Election Procedures...

... a sleight of hand, a slap in the face, a kick in the... 

 

✅ August 5, 2023

Ms. Kristina Ray, N.C. Administrator of Credit Union kristina.ray@nccud.nc.gov

cc: Ms. Rana Badwan, N.C. Attorney General's Office rbadwan@ncdoj.gov

Ref: SECU Board Elections

Dear Ms. Ray,

Thank you for your response (8/2/2023) and willingness to pursue the issues of concern over the illegal board elections being conducted by the SECU Board of Directors and the recent SECU bylaw changes. Thanks for stepping up. Your involvement is important, since the illegal elections directly impact over 2.7 million SECU members and diminish the positive reputation of all North Carolina state-chartered credit unions.

We are requesting another opportunity to meet with you and Ms. Badwan from the Attorney General's office early in the week of August 7/11 to discuss your views on how best to pursue these matters on a reasonable and amicable basis if possible. As you may know, the SECU Board candidate selection process ends on August 11, at which point mitigation of the illegalities may become impossible. We would hope that further damage to the reputation of SECU, other credit unions, and for that matter the entire State can be avoided, with your prompt assistance. We are prepared to meet on any day and at any time next week which your schedule permits. 

North Carolina state-chartered credit unions have a strong history of compliance with State laws, rules & regulations, and their bylaws. Credit unions in North Carolina have always operated on a highly-principled and ethical basis, so you may find it difficult to find any precedence for what is occurring with the SECU Board elections. You will however find voluminous legal precedence and opinion on the illegality of this election on both the federal and international levels.

It is simply illegal for the SECU Board of Directors to exclude any SECU member, who is 18 years old and willing to serve, from independently petitioning to become a candidate for the SECU Board of Directors.  SECU's Board election procedures defy the law, bylaws, long-held cooperative principles, and any normal sense of fairness.

State credit union regulators routinely look to their federal counterparts for guidance on unprecedented issues - a prime example of why the "federal parity" provision (§54.109.21(25)  has been a part of North Carolina law for decades. Far more fundamentally as the Administrator, if the SECU Board is permitted to conduct an illegal election; then without question, the safety and soundness of the SECU will risk impairment.

The SECU Board should not be permitted to unilaterally act - with unbridled audacity - to impair and consistently ignore the best interests of the SECU membership - 2.5+ million of those members are your constituents in North Carolina.

As noted, time is of the essence, as the candidate selection process ends this Friday, August 11, 2023. We look forward to hearing from you as soon as possible. Thank you.

Sincerely, 

Jim Blaine 

 

... a "Ray" of hope for North Carolina?