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!
