WASHINGTON—The Federal Credit Union Act has had a tough week. After both a U.S. senator and several bankers’ associations gave the FCU Act some punches, CUNA has also now sent a letter that offers several suggested modernizations to the Act.
CUNA’s letter was sent in response to the agency’s advanced notice of proposed rulemaking (ANPR) on ways to streamline, clarify and improve standard Federal Credit Union Act bylaws.
“CUNA acknowledges the limitations that the Federal Credit Union Act imposes upon NCUA and the credit union industry as a whole, and each recommendation herein will include a statement as to permissibility under the Act,” the letter reads. “Given that the Act has not been amended by Congress in several decades, CUNA recognizes that the Act is outdated and, in several key areas, fails to reflect practical operational realities of doing business as a credit union.”
Four Specific Suggestions
NCUA’s ANPR posed four specific questions for discussion.
How can the board improve the federal credit union bylaws amendment process?
“CUNA believes that abiding by NCUA-set bylaws should be optional with federal credit unions empowered to issue and comply with their own bylaws, tailored to fit their distinct membership composition, geographic base and member preferences,” the trade association wrote.
How can the board clarify the federal credit union bylaws provisions addressing limitations of services and expulsion of members?
CUNA recommended that the bylaws include examples of acts which could evidence “nonparticipation.” CUNA also stated the term “disruptive to credit union operations,” should also be clarified with agency guidance to help credit unions implement a limitation of service policy.
How can the board improve the federal credit union bylaws to facilitate the recruitment and development of directors?
CUNA said that it believes that recruitment of credit union board members would be enhanced by model processes, starting from guidance for nominating committees to help identify prospective candidates to ongoing development of directors.
How can the board improve the federal credit union bylaws to encourage member attendance at annual and special meetings?
CUNA wrote that the more the agency can encourage remote participation by explicitly including the permissibility of utilizing participation via technological means, the more likely additional members can and will participate in annual and special meetings.
CUNA also noted that extended time to issue the notice for meetings might permit greater participation. Currently, annual meeting notice must be provided at least 30 days but not more than 75 days in advance.