Saturday, March 16, 2024

N.C. Credit Union Division: "Get A Lawyer".

😎 Okay, so we "hired" the federal government as a legal advisor...

Legal Opinions...

NCUA Legal Opinion: SUBJ: FCU Board of Directors Eligibility Requirements

DATE: May 26 1988

✅ "Due to the complexities of credit union operations, questions have been raised regarding the establishment of criteria for FCU members who seek to run for board election. As I mentioned to you, it has long been our position that, generally, the only eligibility requirements for FCU board membership are those contained in the FCU Act. That is, a long as an individual is a member (§111) and has not been convicted of a crime involving dishonesty or breach of trust (5205(d)), he or she is eligible to be elected as a director. There is one exception provided in the bylaws. Article VI, Section 7, permits the board, by resolution, to establish a minimum age requirement. This is essentially the recognition of a board's implied authority to set a restriction based on intellectual and legal competence."

"There are, however, no restrictions on the eligibility requirements that a nominating committee can use in selection candidates for office. We have previously stated that the nominating committee is free to set reasonable standards as to whom it will nominate. Failure to be nominated by the committee, though, does not preclude a member from running for office."

"As mentioned at the outset, the complexities of today' s credit union operations have caused credit union officials to question whether or not minimum qualifications should be placed upon individuals desiring to fill board positions, This is also a concern to NCUA since incompetence ultimately affects this Agency and the NCUSIF. We do not, however, believe that NCUA's position should change on this issue. While permitting officials to establish qualification standards may, at first glance, appear appropriate in the spirit of self management flexibility, it can also be counterproductive to the cooperative nature of credit unions and the self governing characteristics of credit union membership. Existing officials can use standards as a way of perpetuating their own positions or limiting board membership to their own clique."

Second Opinion Letter: October 18, 1994 [excerpt]

As stated in a September 20, 1991, letter from Hattie M. Ulan, Associate General Counsel:

"As long as an individual is a member of the "FCU" (Section 111 of the Act, 12 U.S.C. 1761) and has not been convicted of a crime involving dishonesty or breach of trust (Section 205(d) of the Act, 12 U.S.C. 1785(d)) (or if he has been convicted of such a crime, the NCUA Board has waived the Section 205(d) prohibition), he is eligible for election to the board of directors. Article VI, Section 7 of the Standard FCU Bylaws also permits a board of directors to set a minimum age requirement."

"Any other limitations on eligibility for election would be impermissible."

✅ Third Opinion Letter: November 4, 1986 [excerpt]

Although a member may not be nominated by the nominating committee, he/she would still be-eligible to be nominated by petition or from the floor, as provided by the FCU's bylaws. 

Fourth Opinion Letter: January, 2012 [excerpt]

"i. Eligibility Requirements: The Act and the FCU Bylaws contain the only eligibility requirements for membership on an FCU’s board of directors, which are as follows:

  • (a) The individual must be a member of the FCU before distribution of ballots;
  • (b) the individual cannot have been convicted of a crime involving dishonesty or breach of trust unless the NCUA Board has waived the prohibition for the conviction; and
  • (c) the individual meets the minimum age requirement established under Article V, Section 7 of the FCU Bylaws.

Anyone meeting the three eligibility requirements may run for a seat on the board of directors if properly nominated."

There are a dozen more of these which you can look up at [just search "Legal opinions"]. You don't need to "hire a lawyer" to do that...