[Federal Register Volume 64, Number 198 (Thursday, October 14, 1999)]
[Notices]
[Pages 55760-55773]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-26716]


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NATIONAL CREDIT UNION ADMINISTRATION


Federal Credit Union Bylaws

AGENCY: National Credit Union Administration (NCUA).


ACTION: Notice of Federal Credit Union Bylaws.

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SUMMARY: This notice advises the public of the final changes to the 
federal credit union (FCU) bylaws. The changes consolidate the two 
manuals which currently contain the FCU bylaws into one manual and 
eliminate or modernize several bylaws. This action is necessary because 
several of the bylaws had become outdated or obsolete.

DATES: The Federal Credit Union Bylaws are effective October 14, 1999.

FOR FURTHER INFORMATION CONTACT: Mary F. Rupp, Staff Attorney, Office 
of General Counsel, National Credit Union Administration, 1775 Duke 
Street, Alexandria, Virginia 22314-3428 or telephone: (703) 518-6553.

SUPPLEMENTARY INFORMATION:

Background

    On December 17, 1998, the NCUA Board issued a Notice and Request 
for Comment on proposed Federal Credit Union (FCU) Bylaws. 64 FR 187 
(January 4, 1999). The proposed bylaws were drafted after reviewing 
comments in response to a Request for Comment. 62 FR 11778 (March 13, 
1997). Those commenters supported the bylaws being published as a 
manual rather than a regulation, consolidating the bylaws into one 
publication, deleting outdated and obsolete bylaws, and not requiring 
FCUs to adopt the revised bylaws.
    The proposal was drafted in accordance with those comments. As a 
result, the proposed bylaws are more user friendly for FCUs. All of the 
information is now in one place; plain English is used; provisions that 
are outdated are deleted; and provisions that are operational or 
covered in the Accounting Manual or regulations are deleted, unless it 
was determined that because of their importance they should also be 
included in the bylaws.

Summary of Comments

    The Board received 24 comments in response to its proposal. The 
seven commenters that specifically comment on the revised format of 
consolidating the bylaws in one publication applaud the Board's effort 
to make the bylaws more user friendly. Several commenters also comment 
favorably on the Board's decision to remove operational issues from the 
bylaws. Some of those commenters suggest other areas that could be 
removed because they are operational. These are discussed below. 
Overall the comments were favorable.

Article by Article Analysis of Comments

Article I, Name--Purposes

    Section 2. This provision states the purpose of the credit union is 
``to

[[Page 55761]]

promote thrift among its members * * * and to create for them a source 
of credit for provident or productive purposes.'' One commenter 
suggests changing it to ``provident, productive or business purposes'' 
because the member business loan rule exempts from its limitations 
credit unions that are chartered for the purpose of making business 
loans.
    The Board agrees that, if an FCU determines that in compliance with 
the Federal Credit Union Act (the Act) one of its purposes is to make 
member business loans, it should be permitted to add this language to 
its bylaws. 12 U.S.C. 1757a(b)(1). This provision is optional. The 
final bylaws indicate that FCUs wishing to include the ``business 
purposes'' language in their bylaws may do so.

Article II, Qualifications for Membership

    Sections 2 and 3. These provisions discuss application for 
membership and withdrawal from membership. Four commenters state that 
these provisions are operational and should be deleted. One commenter 
objects to the withdrawal from membership provision on the basis that 
it is inconsistent with the Federal Credit Union Act which states two 
grounds for expulsion. 12 U.S.C. 1764(a) and (b). The commenter fails 
to distinguish between withdrawal and expulsion. One commenter wants 
the provision expanded to include the criteria for membership in the 
Chartering Manual.
    Although operational, the Board believes that including these 
provisions in the bylaws offers useful guidance to FCUs and their 
members without placing any additional burdens on them.
    Section 5. This provision was deleted because the ``once a member 
always a member'' policy is now addressed in the Act. 12 U.S.C. 
1759(e)(2). Two commenters suggest that the bylaw be retained with 
language allowing FCUs to restrict services to members no longer within 
the field of membership.
    The Board agrees that the bylaws are an appropriate place for this 
provision to be included. The bylaw will repeat the statutory language 
and note that FCUs that want to restrict services should state the 
restrictions in this bylaw provision. This provision is now Article II, 
Section 4.

Article III, Shares of Members

    Sections 1 and 3. One commenter likes the proposal's approach of 
allowing the FCU to fill in the par value amount of a share and the 
time frame to complete payment of one share.
    Section 2. One commenter suggests that the requirement that the 
``maximum amount of shares that may be held by any one member shall be 
established from time to time by resolution of the board'' should say 
``may'' instead of ``shall.'' The commenter notes that large FCUs have 
no need for the limitation. The Act requires the board to set the 
maximum amount and so, this provision must remain. 12 U.S.C. 1761b(7).
    One commenter suggests that the requirement that both owners of a 
joint account each purchase a share if they both want to be a member 
should be stated in the bylaw. The Board agrees that the bylaws are the 
appropriate place to clarify that for joint account holders to both be 
members, the account must have at least two shares in it. This 
provision is added as Section 7 of this Article.
    Section 4. This section permits transfer from one member to another 
by ``a written instrument'' and requires the transfer to ``carry 
dividend credits with it.'' Five commenters state that this provision 
is confusing because membership shares generally can't be transferred. 
The intent of this provision is to show that a member can only transfer 
shares to members and that the shares function like stock in a 
corporation.
    Some commenters note that the requirement that it be written is 
outdated. The Board agrees and is deleting the ``written'' requirement.
    Section 5. This section sets forth the requirements for withdrawing 
shares from a member's account. Three commenters note that several of 
these provisions are operational and should be deleted. One of the 
commenters notes that, although section 5(d) allowing deceased members' 
accounts to remain open for a period of four years is operational, it 
should remain because there is no other authority for it. The Board 
agrees that all of the Section 5 provisions are operational but they 
provide useful guidance to the FCU and notice to the member and so, the 
Board will retain them.
    Two commenters suggest that the bylaws include a provision for 
statutory liens because NCUA's proposed rule on statutory liens 
references a bylaw as authority for a statutory lien. 63 FR 57943 
(October 29, 1998). The bylaws do contain a provision for statutory 
liens. It is proposed section 5(c) which is currently Article III, 
Section 5(d) of the FCU Bylaws.
    Four commenters object to deleting Section 5(f). This provision 
allows boards to impose fees for excessive share withdrawals. 
Commenters note that although the Truth in Savings Act (TISA) requires 
FCUs to disclose fees it does not authorize fees. The Board agrees and 
will reinstate this provision in the final bylaws as Section 5(e).

Article IV, Meetings of Members

    Section 1. This section requires the annual meeting to be held 
within 100 miles of the office of the credit union. Four commenters 
suggest adding ``any'' before office to allow FCUs greater flexibility. 
The Board agrees that since the intent is to allow FCUs the maximum 
flexibility possible that ``any'' should be placed before office. One 
commenter suggests that the requirement of an annual meeting be 
eliminated. This requirement is statutory and cannot be eliminated. 12 
U.S.C. 1760.
    Section 2. This section states the time frames for notice of annual 
and special meetings. Under the current bylaws, notice of the annual 
meeting must be given at least 7 days prior to the annual meeting. The 
proposal changes the time to at least 30 days but not more than 75 
days. Five commenters object to the change. The reasons cited were that 
there is more flexibility with 7 days and the new time frame may 
require an additional mailing which would be costly because, in the 
past, the notice was sent with the quarterly statement. The Board 
believes that the requirement of at least 30 days notice to the member 
is not an undue hardship on an FCU and that the notice can still be 
mailed with the quarterly statement. However, 7 days notice could be an 
undue hardship on the membership and does not facilitate maximum member 
participation at the annual meeting. The notice requirements for a 
special meeting are still only 7 days because there is often a need to 
act promptly when scheduling a special meeting. However, that same need 
is not generally associated with the scheduling of the annual meeting.
    Section 3. This section states the number of members necessary to 
request a special meeting. The current bylaws require 25 members or 5%, 
whichever is greater, not to exceed 200. The proposal only changes the 
not-to-exceed number from 200 to 500. Three commenters object to the 
change. It is unclear whether the commenters understood the change 
since one said a percentage is fairer and two said small credit unions 
are penalized. All three commenters ignored the fact that the 5% limit 
still exists. The Board is going to keep the 500 maximum. The intent of 
the increase is to prevent a small number of members in a very large 
credit union from requesting a special meeting every time they don't 
agree with management. The increase has no effect on a small credit 
union.

[[Page 55762]]

    Section 4. This section sets forth the order of business at the 
annual meeting. Two commenters suggest moving the elections to after 
the report by the supervisory committee and one commenter suggests 
deleting this provision because it is operational. The Board agrees 
that this provision is operational, but rather than delete the 
provision, the order of business will no longer be required, but rather 
suggested, with the requirement that, whatever order of business an FCU 
chooses, it must comply with ``Robert's Rules of Order.''
    One commenter suggests that proxy voting be allowed. This is 
prohibited by the Act. 12 U.S.C. 1760.

Article V, Elections

    The proposal lists four election options: (1) In person elections 
with nominating committee and nominations from floor; (2) In person 
elections with nominating committee and nominations by petition; (3) 
Ballot boxes or voting machines with nominating committee and 
nominations by petition; and (4) Electronic device or mail ballot with 
nominating committee and nominations by petition. One commenter 
suggests a fifth option that would allow an individual to place himself 
on the ballot in lieu of nominations from the floor or nomination by 
petition. The Board rejects this suggestion because it is contrary to 
standard business practice. One commenter likes the four options and 
the guidance they offer.
    Two commenters suggest nominations from the floor be deleted 
because they're archaic and one of those commenters also suggests that 
nominations by petition be deleted. The Board recognizes that very few 
FCUs still have nominations from the floor but sees no reason to 
preclude FCUs from conducting their elections in that manner if they 
choose to.
    One commenter opposes FCUs checking a box to select their voting 
method. The commenter is concerned that an FCU may forget to check a 
box or check too many boxes. The commenter suggests that all FCUs 
reprint the bylaws with only the method selected printed. The Board 
believes that FCUs will take the responsibility of selecting their 
bylaws seriously and will follow the appropriate instructions. 
Therefore, FCUs have the option of adopting their bylaws by checking 
the appropriate boxes or reprinting the bylaws with only the provisions 
that apply to them.
    Two commenters note that the revised bylaws allow a combined ballot 
and identification form but require the ballot and identification form 
to be kept in separate places. The commenters are correct that these 
provisions are inconsistent and so, the requirement that the ballot and 
identification form be kept in separate places has been deleted.
    One commenter objects to the requirement for prepaid postage with 
the mail and absentee ballots. The Board has required this in the past 
and will continue to require it. The rationale behind the requirement 
is to elicit as large of a response as possible. In addition, depending 
on the type of postage, an FCU is often not required to pay if the 
prepaid envelope is not returned.
    One commenter objects to the requirement that electronic ballots be 
received 5 calendar days prior to the meeting because other ballots are 
not handled in the same manner. The commenter is wrong. Mail and 
absentee ballots have the same requirements. This enables the FCU to 
tally the votes prior to the annual meeting when the results are 
announced.
    Section 3. Two commenters suggest deleting the order of nominations 
because they are operational. The Board agrees, but rather than delete 
the order because it provides guidance to some FCUs, it has replaced 
``shall'' with ``may.''
    Two commenters suggest adding to the nominating committee's 
responsibilities the duty to determine that the nominees meet the 
criteria for the position. The Board does not agree that this 
requirement should be part of the FCU Bylaws but rather, the board of 
directors in its discretion could make that a responsibility of the 
nominating committee.

Article VI, Board of Directors

    Section 2. The proposal allows an FCU to limit the number of 
directors and their immediate family members that can be paid employees 
of the FCU to 0, 1 or 2. The current bylaws place no limits and the 
standard amendments allow an FCU to select any number. Two commenters 
object to the two limitation. They suggest the number be left to the 
discretion of the FCU. Two other commenters suggest NCUA prohibit any 
director or their immediate family member from being a paid employee. 
Although the Board would prefer to see an FCU limit the number of 
directors and immediate family members that can be paid employees of 
the FCU, the Board agrees with the commenters that the ultimate 
decision should be made by the board of directors. The final bylaws 
allow the FCU to select the number of paid employees that may serve on 
the board or are relatives of board members but retain the limitation 
in the proposal that it is not a majority of the board.
    Section 4. This provision directs the board to fill any vacancies 
on the board, credit committee or supervisory committee ``within a 
reasonable time.'' Four commenters object to ``within a reasonable 
time.'' Some suggestions were to define ``reasonable time,'' put a time 
certain in the bylaw or leave it to the board's discretion.
    The final bylaw will maintain the ``within a reasonable time 
requirement.'' This provision allows the board the flexibility to deal 
with different situations and determine what is reasonable under the 
circumstances.
    Section 5. This section requires one face-to-face board meeting a 
quarter. Six commenters object to this requirement and two commenters 
noted their approval. The objectors state that NCUA should allow the 
board to determine how it wishes to conduct its meetings. The Board 
agrees that NCUA should not dictate how a board conducts its meetings. 
However, the Board does believe that it is important for a board to 
have personal interaction at least once a year, and so, will require 
one face-to-face meeting a year. The only requirement for the annual 
face-to-face meeting is that a quorum be physically present. Board 
members not necessary to obtain a quorum, who wish to participate, may 
do so by one of the other approved methods.
    Two commenters suggest that the bylaws allow telephone and notation 
voting. The revised bylaws allow audio teleconference meetings which is 
the same as telephone voting.
    Section 6(c). One commenter suggests that this provision be 
clarified to state that the board is required to charge off 
uncollectible loans. The Board believes this bylaw is self explanatory 
and does not need further clarification.
    Section 8. This section addresses removal of directors and credit 
committee members for missing 3 consecutive meetings or 4 meetings in a 
calendar year. One commenter suggests adding ``unexcused'' before 
meeting. This is not necessary because the bylaw does not require 
removal, but says the board may remove.

Article VII, Board Officers, Management Officials and Executive 
Committee

    Section 3. This section provides that the chair presides at all 
meetings of the board unless suspended by the supervisory committee. 
The commenter suggests a 2/3 majority of the board also have the power 
to suspend the chair. The Board does not agree. There is no authority 
for the board to suspend the chair. There is statutory authority for

[[Page 55763]]

the supervisory committee to suspend any board member. 12 U.S.C. 1761d.
    Section 4. This section states that the board must approve all 
individuals who are authorized to sign notes, checks, drafts and other 
orders of disbursement. The commenter suggests that the board have the 
authority to delegate approval authority to the Chief Executive 
Officer. The Board believes that this function should remain within the 
purview of the board of directors.
    Section 6. One commenter objects to the use of the term ``general 
manager.'' The commenter suggested a more modern term such as, CEO or 
president. The Addendum to this Article of the bylaws allows an FCU to 
determine the title and rank of each management official and to use 
those titles throughout its bylaws. There is no need to modify this 
provision.
    Section 6(c). This section requires the FCU to post in its office 
in a conspicuous place the FCU's monthly financial statement. Two 
commenters object to this requirement. One said it should be deleted 
because it's operational and the other suggested that the FCU may want 
to post it on the Internet. An FCU may, in addition to posting the 
monthly financial statement in its office, post it on the Internet but 
because not everyone has access to the Internet, the Board is going to 
keep the requirement of posting in the FCU's offices. One commenter 
likes the increase from 7 to 20 days to prepare the financial 
statement.
    Section 6(f). One commenter recommends changing the language in 
this section that authorizes the board to ``employ'' to ``the board may 
designate, appoint or elect.'' The Board prefers the term ``employ'' to 
the suggested language and notes that the bylaw authorizes the 
financial officer and not the board as stated by the commenter.
    One commenter suggests adding a provision that authorizes the board 
to appoint a committee of not less than 3 directors to serve at its 
pleasure. This addition is not necessary because section 10 of this 
Article allows the board to appoint an executive committee that serves 
the same function as the commenter has suggested.
    One commenter commends NCUA for allowing FCUs to determine the 
title and rank of each board officer and management official.

Article VIII, Option 1 Credit Committee or Option 2 Loan Officers (No 
Credit Committee)

    Option 1, Section 8 and Option 2, Section 4. These sections require 
preference be given to smaller loans if all other factors are nearly 
equal. Two commenters object to this provision because FCUs should be 
able to make this decision on a case-by-case basis. Although, there is 
no specific statute or regulation requiring a preference for small 
loans, one of the purposes of an FCU is ``creating a source of credit 
for provident or productive purposes.'' 12 U.S.C. 1752(1). Because this 
provision enables small credit unions to serve more members, the Board 
is retaining it, but changing the language from ``will'' to ``should'' 
in recognition that it is voluntary.
    Option 1, Section 6 and Option 2, Section 2. Two commenters object 
to the requirement that the credit committee and loan officers 
``endeavor diligently to assist applicants in solving their financial 
problems.'' Commenters state that the requirement sets a standard that 
is difficult to quantify or achieve and unnecessary and out of place in 
the bylaws. Recognizing that one of the purposes of an FCU is to 
promote thrift among its members, the Board is retaining this provision 
but changing the language from ``will'' to ``should'' in recognition 
that it is voluntary. 12 U.S.C. 1752(1).

Article IX, Supervisory Committee

    Section 1. This provision states that the supervisory committee 
shall consist of not less than 3 nor more than the maximum number 
permitted by the Act. One commenter suggests that it say ``5'' since 
that's the maximum number permitted by the Act. The Board agrees and 
has changed the language in the bylaw to ``5.''
    Section 4. This section requires the supervisory committee to 
verify the accounts of all members. One commenter suggests it require 
the supervisory committee to ``cause the verification.'' The Board 
agrees and has modified the language so that it is consistent with the 
Act. 12 U.S.C. 1761d. In addition, the commenter suggested ``all 
accounts'' may be unnecessary and that a ``representative sampling'' 
may be more appropriate.
    Since NCUA's regulations set forth the specific requirements for 
the supervisory committee audit and verification, they do not need to 
be repeated in the bylaws. 12 CFR 701.12.
    Section 5. One commenter objects to the requirement that the 
supervisory committee call a special meeting to vote on the removal of 
a suspended director. This requirement is statutory. 12 U.S.C. 1761d.
    One commenter suggests holding supervisory committee members to the 
same attendance requirements as directors and credit committee members. 
Unlike the board of directors and credit committee, there is no 
requirement that the supervisory committee hold monthly meetings and 
so, the same attendance requirements are not appropriate.

Article XI, Loans and Lines of Credit to Members

    Section 1. The proposal tracks the current FCU bylaws and requires 
that a loan to a nonnatural person be either share secured or 
personally guaranteed. Fourteen commenters object to this requirement. 
The commenters note that loans to nonnatural persons are currently 
covered in the business loan regulation and that there is no need or 
justification for additional requirements in the bylaw. The commenters 
note that because of this bylaw federally-insured state-chartered 
credit unions have an unfair advantage over FCUs in this area.
    The Board agrees that because the requirements for loans to 
nonnatural persons are set forth in NCUA's regulations there is no 
justification for placing additional requirements for these loans in 
the bylaws. 12 CFR part 723. This provision is deleted from the final 
bylaws.
    Section 2. Five commenters state that this section should be 
eliminated because it repeats the requirement in section 1 that the 
credit union follow all applicable law and regulations. The Board 
agrees and has deleted this provision.
    Section 3. This section requires members to pay a late charge as 
determined by the board. One commenter suggests that it be deleted. The 
Act requires this section to be in the bylaws. 12 U.S.C. 1757(10).

Article XIII, Deposit of Funds

    Two commenters object to including this provision in the bylaws 
because it's operational. One commenter approves of this provision 
because it grants an FCU the discretion to select the number of days 
within which to make its deposits. Although this provision is 
operational, the Board believes it is helpful for smaller credit unions 
and so, it will remain.

Article XV, Minors

    This provision states that shares may be issued in the name of a 
minor. One commenter states that it should be deleted because it's 
already in the Act. 12 U.S.C. 1765. The Board thinks this provision is 
important and should be repeated in the bylaws.

Article XVI, Definitions

    Four commenters suggest that the definitions be moved to the front 
because it's more user friendly. The

[[Page 55764]]

Board agrees that the definitions should not be in the middle of the 
bylaws, but rather than place them in the front where they are a 
distraction to the reader, the Board has placed them at the end for 
easy reference.
    Section 1(f). One commenter suggests that ``applicable law and 
regulations'' also include ``state law.'' The Board agrees and has 
changed the definition to include ``state law.''

Article XVII, General

    Section 2. This provision states the requirements for officers, 
directors, committee members and employees of the FCU to keep member 
transactions confidential. The provision lists some specific exceptions 
to the confidentiality requirements. Seven commenters object to this 
provision as it's currently drafted. It should be noted that Congress 
is currently considering financial reform legislation that will require 
NCUA and the other financial institution regulators to issue 
regulations governing release of financial information. The commenters 
suggest that rather than list specific exceptions that may become 
outdated in light of the changing law in this area or may not include 
all permissible exceptions, the bylaw should prohibit disclosure except 
when permitted by state or federal law. The Board agrees and has 
modified the bylaw accordingly.
    Section 3. This provision states the authority of the members to 
remove officers, committee members and directors. Several commenters 
like the deletion of the authority of members to remove employees. Four 
commenters suggest that the bylaws either delete the authority of 
members to remove officers or define the term ``officer.'' The Board 
agrees that the term ``officer'' should be deleted.
    Two commenters suggest that a higher number than 15 be required for 
a quorum at a special meeting to remove officers and directors. The 
Board believes that the number required for a quorum for a meeting of 
the members should be consistent throughout the bylaws and has retained 
15.
    Section 7. One commenter suggests eliminating the requirement that 
members keep the FCU informed of their current address. The Board 
believes that the bylaws are an appropriate place for this requirement.
    Section 8. One commenter suggests using the indemnification 
language from the Ohio indemnification statute. The proposal allows an 
FCU to indemnify to the extent allowed by state law or the Model 
Business Corporation Act. The Board sees no reason to limit an FCU to 
one state's law.

Miscellaneous

    Two commenters suggest that the bylaws be redrafted to remove all 
gender specific references. The Board agrees and has made the 
appropriate changes throughout the bylaws.
    Two commenters suggest that the bylaws contain the requirement that 
an FCU's organization certificate and field of membership amendments be 
an appendix to the bylaws. Although Article XVII, Section 5 of the 
proposal requires that the FCU keep these documents in a place of 
safekeeping, the Board agrees that these documents should be kept with 
the bylaws. Section 5 is revised to include this requirement.
    Six commenters suggest that the definitions of ``immediate family 
member'' and ``household'' be included in the bylaws. The commenters 
note that this is particularly important for FCUs that choose to have 
more restrictive definitions than those in the regulation. The Board 
agrees and has added these terms to the definition section of the 
bylaws.

FCUs Adopting Revised Bylaws

    There is some confusion about whether the revised bylaws will be 
mandatory. Although the proposal stated that ``[b]ecause of the 
overwhelming opposition to this requirement, FCUs although strongly 
encouraged to adopt the revised bylaws, are not required to do so and 
may continue to use their previously approved bylaws,'' a few 
commenters objected to the revised bylaws being mandatory. 64 FR at 
187. The Board reiterates that the revised FCU Bylaws are not 
mandatory.
    An issue that has not been addressed is whether FCUs will be 
allowed to adopt just part of the revised bylaws. This is particularly 
important for FCUs that have nonstandard amendments that are not 
addressed in the revised bylaws. The Board, in an effort to achieve 
maximum participation by FCUs, will allow them to adopt portions of the 
revised bylaws, if an FCU finds that adoption of the entire revised 
bylaws is impracticable. The Board cautions FCUs adopting only a 
portion of the revised bylaws to use extreme care because they run the 
risk of having inconsistent or conflicting bylaw provisions.
    In addition, although the Act requires FCUs to use the bylaws 
published by NCUA, FCUs will continue to have the flexibility to 
request a nonstandard bylaw amendment if the need arises. 12 U.S.C. 
1758.

Final Bylaws

    The final bylaws are identical to the proposed bylaws unless noted 
above in the summary of comments. They will be published as a manual 
entitled Federal Credit Union Bylaws. The document will contain an 
index that will make it easier to use than the current bylaws that only 
have an index for the FCU Bylaws and not the Standard Amendments.

    By the National Credit Union Administration Board on October 6, 
1999.
Becky Baker,
Secretary of the Board.

Bylaws

Federal Credit Union, Charter No. __________ (A corporation 
chartered under the laws of the United States)

Article I. Name--Purposes

    Section 1. The name of this credit union is as stated in section 1 
of the charter (approved organization certificate) of this credit 
union.
    Section 2. The purpose of this credit union is to promote thrift 
among its members by affording them an opportunity to accumulate their 
savings and to create for them a source of credit for provident or 
productive purposes. The credit union may add business as one of its 
purposes by placing a comma after ``provident'' and inserting 
``business.''

Article II. Qualifications for Membership

    Section 1. The field of membership of this credit union is limited 
to that stated in section 5 of its charter.
    Section 2. Applications for membership from persons eligible for 
membership under section 5 of the charter must be signed by the 
applicant on forms approved by the board. Upon approval of an 
application by a majority of the directors, or a majority of the 
members of a duly authorized executive committee or by a membership 
officer, and upon subscription to at least one share of this credit 
union and the payment of the initial installment, and the payment of a 
uniform entrance fee if required by the board, the applicant is 
admitted to membership. If a membership application is denied, the 
reasons must be furnished in writing to the person whose application is 
denied, upon written request.
    Section 3. A member who withdraws all shareholdings or fails to 
comply with the time requirements in article III, section 3, ceases to 
be a member. By resolution, the board may require persons readmitted to 
membership to pay another entrance fee.

[[Page 55765]]

    Section 4. Once a member becomes a member that person may remain a 
member until the person or organization chooses to withdraw or is 
expelled in accordance with the Act. A credit union that wishes to 
restrict services to members no longer within the field of membership 
should specify the restrictions in this section.

Article III. Shares of Members

    Section 1. The par value of each share will be $______. 
Subscription to shares are payable at the time of subscription, or in 
installments of at least $______ per month.
    Section 2. The maximum amount of shares that may be held by any one 
member will be established from time to time by resolution of the 
board.
    Section 3. A member who fails to complete payment of one share 
within ______ of admission to membership, or within ______ from the 
increase in the par value of shares, or a member who reduces the share 
balance below the par value of one share and does not increase the 
balance to at least the par value of one share within ______ of the 
reduction may be terminated from membership.
    Section 4. Shares may only be transferred from one member to 
another by an instrument in a form as the board may prescribe. Such 
transfer will carry dividend credits with it.
    Section 5. Money paid in on shares or installments of shares may be 
withdrawn as provided in these bylaws or regulation on any day when 
payment on shares may be made: provided, however, that
    (a) The board has the right, at any time, to require members to 
give, in writing, not more than 60 days notice of intention to withdraw 
the whole or any part of the amounts paid in by them.
    (b) The board may determine that, if shares are paid in under an 
accumulated payroll deduction plan as prescribed in the Accounting 
Manual for Federal Credit Unions, they may not be withdrawn until 
credited to members' accounts.
    (c) No member may withdraw any shareholdings below the amount of 
the member's primary or contingent liability to the credit union if the 
member is delinquent as a borrower, or if borrowers for whom the member 
is comaker, endorser, or guarantor are delinquent, without the written 
approval of the credit committee or loan officer; except that shares 
issued in an irrevocable trust as provided in section 6 of this article 
are not subject to restrictions upon withdrawal except as stated in the 
trust agreement.
    (d) The share account of a deceased member (other than one held in 
joint tenancy with another member) may be continued until the close of 
the dividend period in which the administration of the deceased's 
estate is completed, but not to exceed a period of 4 years.
    (e) The board will have the right, at any time, to impose a fee for 
excessive share withdrawals from regular share accounts. The number of 
withdrawals not subject to a fee and the amount of the fee will be 
established by board resolution and will be subject to regulations 
applicable to the advertising and disclosure of terms and conditions on 
member accounts.
    Section 6. Shares may be issued in a revocable or irrevocable 
trust, subject to the following: When shares are issued in a revocable 
trust, the settlor must be a member of this credit union in his own 
right. When shares are issued in an irrevocable trust, either the 
settlor or the beneficiary must be a member of this credit union. The 
name of the beneficiary must be stated in both a revocable and 
irrevocable trust. For purposes of this section, shares issued pursuant 
to a pension plan authorized by the rules and regulations will be 
treated as an irrevocable trust unless otherwise indicated in the rules 
and regulations.
    Section 7. Owners of a joint account may both be members of the 
credit union without opening separate accounts. For joint membership, 
both owners are required to fulfill all of the membership requirements 
including each member purchasing and maintaining at least one share in 
the account.

Article IV. Meetings of Members

    Section 1. The annual meeting of the members must be held within 
the period authorized in the Act, in the county in which any office of 
the credit union is located or within a radius of 100 miles of such 
office, at the time and place as the board determines and announces in 
the notice of the annual meeting.
    Section 2. At least 30 but no more than 75 days before the date of 
any annual meeting or at least 7 days before the date of any special 
meeting of the members, the secretary must give written notice to each 
member by in person delivery, or by mailing the written notice to each 
member at the address that appears on the records of this credit union. 
Notice of the annual meeting may be given by posting the notice in a 
conspicuous place in the office of this credit union where it may be 
read by the members, at least 30 days prior to such meeting, if the 
annual meeting is to be held during the same month as that of the 
previous annual meeting and if this credit union maintains an office 
that is readily accessible to members where regular business hours are 
maintained. Any meeting of the members, whether annual or special, may 
be held without prior notice, at any place or time, if all the members 
entitled to vote, who are not present at the meeting, waive notice in 
writing, before, during, or after the meeting.
    Notice of any special meeting must state the purpose for which it 
is to be held, and no business other than that related to this purpose 
may be transacted at the meeting.
    Section 3. Special meetings of the members may be called by the 
chair or the board of directors upon a majority vote, or by the 
supervisory committee as provided in these bylaws, and may be held at 
any location permitted for the annual meeting. A special meeting must 
be called by the chair within 30 days of the receipt of a written 
request of 25 members or 5% of the members as of the date of the 
request, whichever number is larger. However, a request of no more than 
500 members may be required for such meeting. The notice of a special 
meeting must be given as provided in section 2 of this article.
    Section 4. The suggested order of business at annual meetings of 
members is--
    (a) Ascertainment that a quorum is present.
    (b) Reading and approval or correction of the minutes of the last 
meeting.
    (c) Report of directors, if there is one.
    (d) Report of the financial officer or the chief management 
official.
    (e) Report of the credit committee, if there is one.
    (f) Report of the supervisory committee.
    (g) Unfinished business.
    (h) New business other than elections.
    (i) Elections.
    (j) Adjournment.
    The order of business must comply with ``Robert's Rules of Order.''
    Section 5. Except as otherwise provided, 15 members constitute a 
quorum at annual or special meetings. If no quorum is present, an 
adjournment may be taken to a date not fewer than 7 nor more than 14 
days thereafter. The members present at any such adjourned meeting will 
constitute a quorum, regardless of the number of members present. The 
same notice must be given for the adjourned meeting as is prescribed in 
section 2 of this article for the original meeting, except that such 
notice must be given not fewer than 5

[[Page 55766]]

days previous to the date of the meeting as fixed in the adjournment.

Article V. Elections

    The Credit Union must select one of the four voting options. This 
may be done by printing the credit union's bylaws with the option 
selected or retaining this copy and checking the box of the option 
selected.

{time}  Option A1--In-Person Elections; Nominating Committee and 
Nominations From Floor

    Section 1. At least 30 days prior to each annual meeting, the chair 
will appoint a nominating committee of not fewer than three members. It 
is the duty of the nominating committee to nominate at least one member 
for each vacancy, including any unexpired term vacancy, for which 
elections are being held, and to determine that the members nominated 
are agreeable to the placing of their names in nomination and will 
accept office if elected.
    Section 2. After the nominations of the nominating committee have 
been placed before the members, the chair calls for nominations from 
the floor. When nominations are closed, tellers are appointed by the 
chair, ballots are distributed, the vote is taken and tallied by the 
tellers, and the results announced. All elections are determined by 
plurality vote and will be by ballot except where there is only one 
nominee for the office.

{time}  Option A2--In-Person Elections; Nominating Committee and 
Nominations by Petition

    Section 1. At least 120 days prior to each annual meeting the chair 
will appoint a nominating committee of not fewer than three members. It 
is the duty of the nominating committee to nominate at least one member 
for each vacancy, including any unexpired term vacancy, for which 
elections are being held, and to determine that the members nominated 
are agreeable to the placing of their names in nomination and will 
accept office if elected. The nominating committee files its 
nominations with the secretary of the credit union at least 90 days 
prior to the annual meeting, and the secretary notifies in writing all 
members eligible to vote at least 75 days prior to the annual meeting 
that nominations for vacancies may also be made by petition signed by 
1% of the members with a minimum of 20 and a maximum of 500.
    The written notice must indicate that the election will not be 
conducted by ballot and there will be no nominations from the floor 
when there is only one nominee for each position to be filled. A brief 
statement of qualifications and biographical data in a form approved by 
the board of directors will be included for each nominee submitted by 
the nominating committee with the written notice to all eligible 
members. Each nominee by petition must submit a similar statement of 
qualifications and biographical data with the petition. The written 
notice must state the closing date for receiving nominations by 
petition. In all cases, the period for receiving nominations by 
petition must extend at least 30 days from the date that the petition 
requirement and the list of nominating committee's nominees are mailed 
to all members. To be effective, such nominations must be accompanied 
by a signed certificate from the nominee or nominees stating that they 
are agreeable to nomination and will serve if elected to office. Such 
nominations must be filed with the secretary of the credit union at 
least 40 days prior to the annual meeting and the secretary will ensure 
that nominations by petition along with those of the nominating 
committee are posted in a conspicuous place in each credit union office 
at least 35 days prior to the annual meeting.
    Section 2. All persons nominated by either the nominating committee 
or by petition must be placed before the members. When nominations are 
closed, tellers are appointed by the chair, ballots are distributed, 
the vote is taken and tallied by the tellers, and the results 
announced. All elections are determined by plurality vote and will be 
by ballot except where there is only one nominee for each position to 
be filled.
    Nominations cannot be made from the floor unless insufficient 
nominations have been made by the nominating committee or by petition 
to provide for one nominee for each position to be filled or 
circumstances prevent the candidacy of the one nominee for a position 
to be filled. Only those positions without a nominee are subject to 
nominations from the floor. In the event nominations from the floor are 
permitted and result in more than one nominee for a position to be 
filled, when nominations have been closed, tellers are appointed by the 
chair, ballots are distributed, the vote is taken and tallied by the 
tellers, and the results announced. When only one member is nominated 
for each position to be filled, the chair may take a voice vote or 
declare each nominee elected by general consent or acclamation at the 
annual meeting.

{time}  Option A3--Election by Ballot Boxes or Voting Machine; 
Nominating Committee and Nomination by Petition

    Section 1. At least 120 days prior to each annual meeting, the 
chair will appoint a nominating committee of not fewer than three 
members. It is the duty of the nominating committee to nominate at 
least one member for each vacancy, including any unexpired term 
vacancy, for which elections are being held, and to determine that the 
members nominated are agreeable to the placing of their names in 
nomination and will accept office if elected. The nominating committee 
files its nominations with the secretary of the credit union at least 
90 days prior to the annual meeting, and the secretary notifies in 
writing all members eligible to vote at least 75 days prior to the 
annual meeting that nominations for vacancies may also be made by 
petition signed by 1% of the members with a minimum of 20 and a maximum 
of 500.
    The written notice must indicate that the election will not be 
conducted by ballot and there will be no nominations from the floor 
when there is only one nominee for each position to be filled. A brief 
statement of qualifications and biographical data in a form approved by 
the board of directors will be included for each nominee submitted by 
the nominating committee with the written notice to all eligible 
members. Each nominee by petition must submit a similar statement of 
qualifications and biographical data with the petition. The written 
notice must state the closing date for receiving nominations by 
petition. In all cases, the period for receiving nominations by 
petition must extend at least 30 days from the date of the petition 
requirement and the list of nominating committee's nominees are mailed 
to all members. To be effective, such nominations must be accompanied 
by a signed certificate from the nominee or nominees stating that they 
are agreeable to nomination and will serve if elected to office. Such 
nominations must be filed with the secretary of the credit union at 
least 40 days prior to the annual meeting and the secretary will ensure 
that nominations by petition along with those of the nominating 
committee are posted in a conspicuous place in each credit union office 
at least 35 days prior to the annual meeting.
    Section 2. All elections are determined by plurality vote. The 
election will be conducted by ballot boxes or voting machines, subject 
to the following conditions:
    (a) The election tellers will be appointed by the board of 
directors;

[[Page 55767]]

    (b) If sufficient nominations are made by the nominating committee 
or by petition to provide more than one nominee for any position to be 
filled, the secretary, at least 10 days prior to the annual meeting, 
will cause ballot boxes and printed ballots, or voting machines, to be 
placed in conspicuous locations, as determined by the board of 
directors with the names of the candidates posted near the boxes or 
voting machines. The name of each candidate will be followed by a brief 
statement of qualifications and biographical data in a form approved by 
the board of directors;
    (c) After the members have been given 24 hours to vote at 
conspicuous locations as determined by the board of directors, the 
ballot boxes or voting machines will be opened, the vote tallied by the 
tellers, the tallies placed in the ballot boxes, and the ballot boxes 
resealed. The tellers are responsible at all times for the ballot boxes 
or voting machines and the integrity of the vote. A record must be kept 
of all persons voting and the tellers must assure themselves that each 
person so voting is entitled to vote; and
    (d) The ballot boxes will be taken to the annual meeting by the 
tellers. At the annual meeting, printed ballots will be distributed to 
those in attendance who have not voted and their votes will be 
deposited in the ballot boxes placed by the tellers, before the 
beginning of the meeting, in conspicuous locations with the names of 
the candidates posted near them. After such members have been given an 
opportunity to vote at the annual meeting, balloting will be closed, 
the ballot boxes opened, the vote tallied by the tellers and added to 
the previous count, and the chair will announce the result of the vote.

{time}  Option A4--Election by Electronic Device (Including But Not 
Limited to Telephone and Electronic Mail) or Mail Ballot; 
Nominating Committee and Nominations by Petition

    Section 1. At least 120 days prior to each annual meeting, the 
chair will appoint a nominating committee of not fewer than three 
members. It is the duty of the nominating committee to nominate at 
least one member for each vacancy, including any unexpired term 
vacancy, for which elections are being held, and to determine that the 
members nominated are agreeable to the placing of their names in 
nomination and will accept office if elected. The nominating committee 
files its nominations with the secretary of the credit union at least 
90 days prior to the annual meeting, and the secretary notifies in 
writing all members eligible to vote at least 75 days prior to the 
annual meeting that nominations for vacancies may also be made by 
petition signed by 1% of the members with a minimum of 20 and a maximum 
of 500.
    The written notice must indicate that the election will not be 
conducted by ballot and there will be no nominations from the floor 
when there is only one nominee for each position to be filled. A brief 
statement of qualifications and biographical data in a form approved by 
the board of directors will be included for each nominee submitted by 
the nominating committee with the written notice to all eligible 
members. Each nominee by petition must submit a similar statement of 
qualifications and biographical data with the petition. The written 
notice must state the closing date for receiving nominations by 
petition. In all cases, the period for receiving nominations by 
petition must extend at least 30 days from the date of the petition 
requirement and the list of nominating committee's nominees are mailed 
to all members. To be effective, such nominations must be accompanied 
by a signed certificate from the nominee or nominees stating that they 
are agreeable to nomination and will serve if elected to office. Such 
nominations must be filed with the secretary of the credit union at 
least 40 days prior to the annual meeting and the secretary will ensure 
that nominations by petition along with those of the nominating 
committee are posted in a conspicuous place in each credit union office 
at least 35 days prior to the annual meeting.
    Section 2. All elections will be by electronic device or mail 
ballot, subject to the following conditions:
    (a) The election tellers will be appointed by the board of 
directors;
    (b) If sufficient nominations are made by the nominating committee 
or by petition to provide more than one nominee for any position to be 
filled, the secretary, at least 30 days prior to the annual meeting, 
will cause either a printed ballot or notice of ballot to be mailed to 
all members eligible to vote;
    (c) If the credit union is conducting its elections electronically, 
the secretary will cause the following materials to be mailed to each 
eligible voter and the following procedures will be followed:
    (1) One notice of balloting stating the names of the candidates for 
the board of directors and the candidates for other separately 
identified offices or committees. The name of each candidate must be 
followed by a brief statement of qualifications and biographical data 
in a form approved by the board of directors.
    (2) One instruction sheet stating specific instructions for the 
electronic election procedure, including how to access and use the 
system, and the period of time in which votes will be taken. The 
instruction will state that members without the requisite electronic 
device necessary to vote on the system may vote by mail ballot upon 
written or telephone request and specify the date the request must be 
received by the credit union.
    (3) It is the duty of the tellers of election to verify, or cause 
to be verified the name of the voter and the credit union account 
number as they are registered in the electronic balloting system. It is 
the duty of the teller to test the integrity of the balloting system at 
regular intervals during the election period.
    (4) Ballots must be received no later than midnight 5 calendar days 
prior to the annual meeting.
    (5) Voting will be closed at the midnight deadline specified in 
subsection (4) hereof and the vote will be tallied by the tellers. The 
result must be verified at the annual meeting and the chair will make 
the result of the vote public at the annual meeting.
    (6) In the event of malfunction of the electronic balloting system, 
the board of directors may in its discretion order elections be held by 
mail ballot only. Such mail ballots must conform to section 2(d) of 
this Article and must be mailed to all eligible members 30 days prior 
to the annual meeting. The board may make reasonable adjustments to the 
voting time frames above, or postpone the annual meeting when 
necessary, to complete the elections prior to the annual meeting.
    (d) If the credit union is conducting its election by mail ballot, 
the secretary will cause the following materials to be mailed to each 
member and the following procedures will be followed:
    (1) One ballot, clearly identified as such, on which the names of 
the candidates for the board of directors and the candidates for other 
separately identified offices or committees are printed in order as 
determined by the draw of lots. The name of each candidate will be 
followed by a brief statement of qualifications and biographical data 
in a form approved by the board of directors;
    (2) One ballot envelope clearly marked with instructions that the 
completed ballot must be placed in that envelope and sealed;
    (3) One identification form to be completed so as to include the 
name, address, signature and credit union account number of the voter;
    (4) One mailing envelope in which the voter, pursuant to 
instructions provided with the mailing envelope,

[[Page 55768]]

must insert the sealed ballot envelope and the identification form, and 
which must have postage prepaid and be preaddressed for return to the 
tellers;
    (5) When properly designed, one form can be printed that represents 
a combined ballot and identification form, and postage prepaid and 
preaddressed return envelope;
    (6) It is the duty of the tellers to verify, or cause to be 
verified, the name and credit union account number of the voter as 
appearing on the identification form; to place the verified 
identification form and the sealed ballot envelope in a place of 
safekeeping pending the count of the vote; in the case of a 
questionable or challenged identification form, to retain the 
identification form and sealed ballot envelope together until the 
verification or challenge has been resolved;
    (7) Ballots mailed to the tellers must be received by the tellers 
no later than midnight 5 days prior to the date of the annual meeting;
    (8) Voting will be closed at the midnight deadline specified in 
subsection (7) hereof and the vote will be tallied by the tellers. The 
result will be verified at the annual meeting and the chair will make 
the result of the vote public at the annual meeting.
    Section 3. Nominations may be in the following order:
    (a) Nominations for directors.
    (b) Nominations for credit committee members, if applicable. 
Elections may be by separate ballots following the same order as the 
above nominations or, if preferred, may be by one ballot for all 
offices.
    Section 4. Members cannot vote by proxy, but a member other than a 
natural person may vote through an agent designated in writing for the 
purpose. A trustee, or other person acting in a representative 
capacity, is not, as such, entitled to vote.
    Section 5. Irrespective of the number of shares, no member has more 
than one vote.
    Section 6. The names and addresses of members of the board, board 
officers, executive committee, and members of the credit committee, if 
applicable, and supervisory committees must be forwarded to the 
Administration in accordance with the Act and regulations in the manner 
as may be required by the Administration.
    Section 7. The board may establish by resolution a minimum age, not 
greater than 18 years of age, as a qualification for eligibility to 
vote at meetings of the members, or to hold elective or appointive 
office, or both.
    The Credit Union may select the absentee ballot provision in 
conjunction with the voting procedure it has selected. This may be done 
by printing the credit union's bylaws with this provision or by 
retaining this copy and checking the box.
    {time}  Section 8 The board of directors may authorize the use of 
absentee ballots in conjunction with the other procedures authorized in 
this article, subject to the following conditions:
    (a) The election tellers will be appointed by the board of 
directors;
    (b) If sufficient nominations are made by the nominating committee 
or by petition to provide more than one nominee for any position to be 
filled, the secretary, at least 30 days prior to the annual meeting, 
will cause printed ballots to be mailed to all members of the credit 
union who are eligible to vote and who have submitted a written request 
for an absentee ballot;
    (c) The secretary will cause the following materials to be mailed 
to each such eligible voter who has submitted a written request for an 
absentee ballot:
    (1) One ballot, clearly identified as such, on which the names of 
the candidates for the board of directors and the candidates for other 
separately identified offices or committees are printed in order as 
determined by the draw of the lots. The name of each candidate will be 
followed by a brief statement of qualifications and biographical data 
in a form approved by the board of directors;
    (2) One ballot envelope clearly marked with instructions that the 
completed ballot must be placed in that envelope and sealed;
    (3) One identification form to be completed so as to include the 
name, address, signature and credit union account number of the voter;
    (4) One mailing envelope in which the voter, pursuant to 
instructions provided with the envelope, must insert the sealed ballot 
envelope and the identification form, and which must have postage 
prepaid and be preaddressed for return to the tellers;
    (5) When properly designed, one form can be printed that represents 
a combined ballot and identification form, and postage prepaid and 
preaddressed return envelope;
    (d) It is the duty of the tellers of election to verify, or cause 
to be verified, the name and credit union account number of the voter 
as appearing on the identification form; to place the verified 
identification and the sealed ballot envelope in a place of safekeeping 
pending the count of the vote; in the case of a questionable or 
challenged identification form, to retain the identification form and 
the sealed ballot envelope together until the verification or challenge 
has been resolved; and in the event that more than one voting procedure 
is used, to verify that no eligible voter has voted more than one time;
    (e) Ballots mailed to the tellers pursuant to subsection (b) 
hereof, must be received by the tellers no later than midnight 5 days 
prior to the date of the annual meeting; and
    (f) After the expiration of the period of time specified in the 
preceding subsection (e), the voting by absentee ballot will be closed 
and absentee ballots deposited in the ballot boxes to be taken to the 
annual meeting or included in a precount in accordance with procedures 
specified in Article V, Section 2.

Article VI. Board of Directors

    Section 1. The board consists of __________ members, all of whom 
must be members of this credit union. The number of directors may be 
changed to an odd number not fewer than 5 nor more than 15 by 
resolution of the board. No reduction in the number of directors may be 
made unless corresponding vacancies exist as a result of deaths, 
resignations, expiration of terms of office, or other actions provided 
by these bylaws. A copy of the resolution of the board covering any 
increase or decrease in the number of directors must be filed with the 
official copy of the bylaws of this credit union.
    Section 2. __________ (Fill in the number) directors or committee 
members may be a paid employee of the credit union. __________ (Fill in 
the number) immediate family members of a director or committee member 
may be a paid employee of the credit union. In no case may employees 
and family members constitute a majority of the board. The board may 
appoint a management official who __________ (may or may not) be a 
member of the board and one or more assistant management officials who 
__________ (may or may not) be a member of the board. If the management 
official or assistant management official is permitted to serve on the 
board, he or she may not serve as the chair.
    Section 3. Regular terms of office for directors must be for 
periods of either 2 or 3 years as the board determines: provided, 
however, that all regular terms must be for the same number of years 
and until the election and qualification of successors. The regular 
terms must be fixed at the beginning, or upon any increase or decrease 
in the number of directors, that approximately an equal number of 
regular terms must expire at each annual meeting.

[[Page 55769]]

    Section 4. Any vacancy on the board, credit committee, if 
applicable, or supervisory committee will be filled within a reasonable 
time by vote of a majority of the directors then holding office. 
Directors and credit committee members so appointed will hold office 
only until the next annual meeting, at which any unexpired terms will 
be filled by vote of the members, and until the qualification of their 
successors. Members of the supervisory committee so appointed will hold 
office until the first regular meeting of the board following the next 
annual meeting of members, at which the regular term expires, and until 
the appointment and qualification of their successors.
    Section 5. A regular meeting of the board must be held each month 
at the time and place fixed by resolution of the board. One regular 
meeting each calendar year must be conducted in person. If a quorum is 
present in person for the annual in person meeting, the remaining board 
members may participate using audio or video teleconference methods. 
The other regular meetings may be conducted using audio or video 
teleconference methods. The chair, or in the chair's absence the 
ranking vice chair, may call a special meeting of the board at any time 
and must do so upon written request of a majority of the directors then 
holding office. Unless the board prescribes otherwise, the chair, or in 
the chair's absence the ranking vice chair, will fix the time and place 
of special meetings. Notice of all meetings will be given in such 
manner as the board may from time to time by resolution prescribe. 
Special meetings may be conducted using audio or video teleconference 
methods.
    Section 6. The board has the general direction and control of the 
affairs of this credit union and is responsible for performing all the 
duties customarily performed by boards of directors. This includes but 
is not limited to the following:
    (a) Directing the affairs of the credit union in accordance with 
the Act, these bylaws, the rules and regulations and sound business 
practices.
    (b) Establishing programs to achieve the purposes of this credit 
union as stated in Article 1, section 2, of these bylaws.
    (c) Establishing a loan collection program and authorizing the 
chargeoff of uncollectible loans.
    (d) Determining that all persons appointed or elected by this 
credit union to any position requiring the receipt, payment or custody 
of money or other property of this credit union, or in its custody or 
control as collateral or otherwise, are properly bonded in accordance 
with the Act and regulations.
    (e) Performing additional acts and exercising additional powers as 
may be required or authorized by applicable law.
    If the credit union has an elected credit committee, you do not 
need to check a box. If the credit union has no credit committee check 
Option 1 and if it has an appointed credit committee check Option 2.

{time}  Option 1--No Credit Committee

    (f) Reviewing denied loan applications of members who file written 
requests for such review.
    (g) Appointing one or more loan officers and delegating to those 
officers the power to approve or disapprove loans, lines of credit or 
advances from lines of credit.
    (h) In its discretion, appointing a loan review committee to review 
loan denials and delegating to the committee the power to overturn 
denials of loan applications. The committee will function as a mid-
level appeal committee for the board. Any denial of a loan by the 
committee must be reviewed by the board upon written request of the 
member. The committee must consist of three members and the regular 
term of office of the committee member will be for two years. Not more 
than one member of the committee may be appointed as a loan officer.

{time}  Option 2--Appointed Credit Committee.

    (f) Appointing an odd number of credit committee members as 
provided in Article VIII of these bylaws.
    Section 7. A majority of the number of directors, including any 
vacant positions, constitutes a quorum for the transaction of business 
at any meeting; but fewer than a quorum may adjourn from time to time 
until a quorum is in attendance.
    Section 8. If a director or a credit committee member, if 
applicable, fails to attend regular meetings of the board or credit 
committee, respectively, for 3 consecutive months, or 4 meetings within 
a calendar year, or otherwise fails to perform any of the duties as a 
director or a credit committee member, the office may be declared 
vacant by the board and the vacancy filled as provided in the bylaws. 
The board may remove any board officer from office for failure to 
perform the duties thereof, after giving the officer reasonable notice 
and opportunity to be heard.
    When any board officer, membership officer, executive committee 
member or investment committee member is absent, disqualified, or 
otherwise unable to perform the duties of the office, the board may by 
resolution designate another member of this credit union to fill the 
position temporarily. The board may also, by resolution, designate 
another member or members of this credit union to act on the credit 
committee when necessary in order to obtain a quorum.
    Section 9. Any member of the supervisory committee may be suspended 
by a majority vote of the board of directors. The members of this 
credit union will decide, at a special meeting held not fewer than 7 
nor more than 14 days after any such suspension, whether the suspended 
committee member will be removed from or restored to the supervisory 
committee.

Article VII. Board Officers, Management Officials and Executive 
Committee

    Section 1. The board officers of this credit union are comprised of 
a chair, one or more vice chairs, a financial officer, and a secretary, 
all of whom are elected by the board and from their number. The board 
determines the title and rank of each board officer and records them in 
the addendum to this Article. One board officer, the ________________, 
may be compensated for services as determined by the board. If more 
than one vice chair is elected, the board determines their rank as 
first vice chair, second vice chair, and so on. The offices of the 
financial officer and secretary may be held by the same person. Unless 
removed as provided in these bylaws, the board officers elected at the 
first meeting of the board hold office until the first meeting of the 
board following the first annual meeting of the members and until the 
election and qualification of their respective successors.
    Section 2. Board officers elected at the meeting of the board next 
following the annual meeting of the members, which must be held not 
later than 7 days after the annual meeting, hold office for a term of 1 
year and until the election and qualification of their respective 
successors: provided, however, that any person elected to fill a 
vacancy caused by the death, resignation, or removal of an officer is 
elected by the board to serve only for the unexpired term of such 
officer and until a successor is duly elected and qualified.
    Section 3. The chair presides at all meetings of the members and at 
all meetings of the board, unless disqualified through suspension by 
the supervisory committee. The chair also performs such other duties as 
customarily appertain to the office of

[[Page 55770]]

the chair or as may be directed to perform by resolution of the board 
not inconsistent with the Act and regulations and these bylaws.
    Section 4. The board must approve all individuals who are 
authorized to sign all notes of this credit union and all checks, 
drafts and other orders for disbursement of credit union funds.
    Section 5. The ranking vice chair has and may exercise all the 
powers, authority, and duties of the chair during the chair's absence 
or inability to act.
    Section 6. The financial officer manages this credit union under 
the control and direction of the board unless the board has appointed a 
management official to act as general manager. Subject to such 
limitations, controls and delegations as may be imposed by the board, 
the financial officer will:
    (a) Have custody of all funds, securities, valuable papers and 
other assets of this credit union.
    (b) Provide and maintain full and complete records of all the 
assets and liabilities of this credit union in accordance with forms 
and procedures prescribed in the Accounting Manual for Federal Credit 
Unions or otherwise approved by the Administration.
    (c) Within 20 days after the close of each month, ensure that a 
financial statement showing the condition of this credit union as of 
the end of the month, including a summary of delinquent loans is 
prepared and submitted to the board and post a copy of such statement 
in a conspicuous place in the office of the credit union where it will 
remain until replaced by the financial statement for the next 
succeeding month.
    (d) Ensure that such financial and other reports as the 
Administration may require are prepared and sent.
    (e) Within standards and limitations prescribed by the board, 
employ tellers, clerks, bookkeepers, and other office employees, and 
have the power to remove such employees.
    (f) Perform such other duties as customarily appertain to the 
office of the financial officer or as may be directed to perform by 
resolution of the board not inconsistent with the Act, regulations and 
these bylaws.
    The board may employ one or more assistant financial officers, none 
of whom may also hold office as chair or vice chair, and may authorize 
them, under the direction of the financial officer, to perform any of 
the duties devolving on the financial officer, including the signing of 
checks. When designated by the board, any assistant financial officer 
may also act as financial officer during the financial officer's 
temporary absence or temporary inability to act.
    Section 7. The board may appoint a management official who is under 
the direction and control of the board or of the financial officer as 
determined by the board. The management official may be assigned any or 
all of the responsibilities of the financial officer described in 
section 6 of this article. The board will determine the title and rank 
of each management official and record them in the addendum to this 
article. The board may employ one or more assistant management 
officials. The board may authorize assistant management officials under 
the direction of the management official, to perform any of the duties 
devolving on the management official, including the signing of checks. 
When designated by the board, any assistant management official may 
also act as management official during the management official's 
temporary absence or temporary inability to act.
    Section 8. The board employs, fixes the compensation, and 
prescribes the duties of such employees as may in the discretion of the 
board be necessary, and has the power to remove such employees, unless 
it has delegated these powers to the financial officer or management 
official. Neither the board, the financial officer, nor the management 
official has the power or duty to employ, prescribe the duties of, or 
remove necessary clerical and auditing assistance employed or utilized 
by the supervisory committee and, if there is a credit committee, the 
power or duty to employ, prescribe the duties of, or remove any loan 
officer appointed by the credit committee.
    Section 9. The secretary prepares and maintains full and correct 
records of all meetings of the members and of the board, which records 
will be prepared within 7 days after the respective meetings. The 
secretary must promptly inform the Administration in writing of any 
change in the address of the office of this credit union or the 
location of its principal records. The secretary will give or cause to 
be given, in the manner prescribed in these bylaws, proper notice of 
all meetings of the members, and perform such other duties as may be 
directed to perform by resolution of the board not inconsistent with 
the Act, regulations and these bylaws. The board may employ one or more 
assistant secretaries, none of whom may also hold office as chair, vice 
chair, or financial officer, and may authorize them under direction of 
the secretary to perform any of the duties devolving on the secretary.
    Section 10. The board may appoint an executive committee of not 
fewer than three directors to serve at its pleasure, to act for it with 
respect to specifically delegated functions authorized by the Act and 
regulations. The board may also authorize such executive committee or a 
membership officer(s) appointed by the board from the membership other 
than a board member paid as an officer, the financial officer, any 
assistant to the paid officer of the board or to the financial officer 
or any loan officer, to serve at its pleasure to approve applications 
for membership under such conditions as the board and these bylaws may 
prescribe. No executive committee member or membership officer may be 
compensated as such.
    Section 11. The board may appoint an investment committee composed 
of not less than two, to serve at its pleasure to have charge of making 
investments under rules and procedures established by the board. No 
member of the investment committee may be compensated as such.
    Addendum: The board must list the positions of the board officers 
and management officials of this credit union. They are as follows:
    Select Option 1 if the credit union has a credit committee and 
Option 2 if it does not have a credit committee.

{time}  Option 1--Article VIII. Credit Committee

    Section 1. The credit committee consists of __________ members. All 
the members of the credit committee must be members of this credit 
union. The number of members of the credit committee must be an odd 
number and may be changed to not fewer than 3 nor more than 7 by 
resolution of the board. No reduction in the number of members may be 
made unless corresponding vacancies exist as a result of deaths, 
resignations, expiration of terms of office, or other actions provided 
by these bylaws. A copy of the resolution of the board covering any 
increase or decrease in the number of committee members must be filed 
with the official copy of the bylaws of this credit union.
    Section 2. Regular terms of office for elected credit committee 
members are for periods of either 2 or 3 years as the board determines: 
provided, however, that all regular terms are for the same number of 
years and until the election and qualification of successors. The 
regular terms are fixed at the beginning, or upon any increase or 
decrease in the number of committee members, that approximately an 
equal number of regular terms expire at each annual meeting.

[[Page 55771]]

    Regular terms of office for appointed credit committee members are 
for periods as determined by the board and as noted in the board's 
minutes.
    Section 3. The credit committee chooses from their number a chair 
and a secretary. The secretary of the committee prepares and maintains 
full and correct records of all actions taken by it, and such records 
must be prepared within 3 days after the action. The offices of the 
chair and secretary may be held by the same person.
    Section 4. The credit committee may, by majority vote of its 
members, appoint one or more loan officers to serve at its pleasure, 
and delegate to them the power to approve application for loans or 
lines of credit, share withdrawals, releases and substitutions of 
security, within limits specified by the committee and within limits of 
applicable law and regulations. Not more than one member of the 
committee may be appointed as a loan officer. Each loan officer must 
furnish to the committee a record of each approved or not approved 
transaction within 7 days of the date of the filing of the application 
or request, and such record becomes a part of the records of the 
committee. All applications or requests not approved by a loan officer 
must be acted upon by the committee. No individual may disburse funds 
of this credit union for any application or share withdrawal which the 
individual has approved as a loan officer.
    Section 5. The credit committee holds meetings as the business of 
this credit union may require, and not less frequently than once a 
month. Notice of such meetings will be given to members of the 
committee in a manner as the committee may from time to time, by 
resolution, prescribe.
    Section 6. The credit committee or loan officer must for each loan 
or line of credit inquire into the character and financial condition of 
the applicant and the applicant's sureties, if any, to ascertain their 
ability to repay fully and promptly the obligations incurred by them 
and to determine whether the loan or line of credit will be of probable 
benefit to the borrower. The credit committee and its appointed loan 
officers should endeavor diligently to assist applicants in solving 
their financial problems.
    Section 7. No loan or line of credit may be made unless approved by 
the committee or a loan officer in accordance with applicable law and 
regulations.
    Section 8. Subject to the limits imposed by applicable law and 
regulations, these bylaws, and the general policies of the board, the 
credit committee, or a loan officer, determines the security, if any, 
required for each application and the terms of repayment. The security 
furnished must be adequate in quality and character and consistent with 
sound lending practices. When funds are not available to make all the 
loans and lines of credit for which there are applications, preference 
should be given, in all cases, to the smaller applications if the need 
and credit factors are nearly equal.

{time}  Option 2--Article VIII. Loan Officers (No Credit Committee)

    Section 1. Each loan officer must maintain a record of each 
approved or not approved transaction within 7 days of the filing of the 
application or request, and such record becomes a part of the records 
of the credit union. No individual may disburse funds of this credit 
union for any application or share withdrawal which the individual has 
approved as a loan officer.
    Section 2. The loan officer must for each loan or line of credit 
inquire into the character and financial condition of the applicant and 
the applicant's sureties, if any, to ascertain their ability to repay 
fully and promptly the obligations incurred by them and to determine 
whether the loan or line of credit will be of probable benefit to the 
borrower. The loan officers should endeavor diligently to assist 
applicants in solving their financial problems.
    Section 3. No loan or line of credit may be made unless approved by 
a loan officer in accordance with applicable law and regulations.
    Section 4. Subject to the limits imposed by applicable law and 
regulations, these bylaws, and the general policies of the board, a 
loan officer determines the security if any required for each 
application and the terms of repayment. The security furnished must be 
adequate in quality and character and consistent with sound lending 
practices. When funds are not available to make all the loans and lines 
of credit for which there are applications, preference should be given, 
in all cases, to the smaller applications if the need and credit 
factors are nearly equal.

Article IX. Supervisory Committee

    Section 1. The supervisory committee is appointed by the board from 
among the members of this credit union, one of whom may be a director 
other than the financial officer. The board determines the number of 
members on the committee, which may not be fewer than 3 nor more than 
5. No member of the credit committee, if applicable, or any employee of 
this credit union may be appointed to the committee. Regular terms of 
committee members are for periods of 1, 2, or 3 years as the board 
determines: provided, however, that all regular terms are for the same 
number of years and until the appointment and qualification of 
successors. The regular terms are fixed at the beginning, or upon any 
increase or decrease in the number of committee members, so that 
approximately an equal number of regular terms expires at each annual 
meeting.
    Section 2. The supervisory committee members choose from among 
their number a chair and a secretary. The secretary of the supervisory 
committee prepares, maintains, and has custody of full and correct 
records of all actions taken by it. The offices of chair and secretary 
may be held by the same person.
    Section 3. The supervisory committee makes, or causes to be made, 
such audits, and prepares and submits such written reports, as are 
required by the Act and regulations. The committee may employ and use 
such clerical and auditing assistance as may be required to carry out 
its responsibilities prescribed by this article, and may request the 
board to provide compensation for such assistance. It will prepare and 
forward to the Administration such reports as may be required.
    Section 4. The supervisory committee will cause the verification of 
the accounts of all members with the records of the financial officer 
from time to time and not less frequently than as required by the Act 
and regulations. The committee must maintain a record of such 
verification.
    Section 5. By unanimous vote, the supervisory committee may suspend 
until the next meeting of the members any director, board officer, or 
member of the credit committee. In the event of any such suspension, 
the supervisory committee must call a special meeting of the members to 
act on the suspension, which meeting must be held not fewer than 7 nor 
more than 14 days after the suspension. The chair of the committee acts 
as chair of the meeting unless the members select another person to act 
as chair.
    Section 6. By the affirmative vote of a majority of its members, 
the supervisory committee may call a special meeting of the members to 
consider any violation of the provisions of the Act, the regulations, 
or of the charter or the bylaws of this credit union, or to consider 
any practice of this credit union which the committee deems to be 
unsafe or unauthorized.

[[Page 55772]]

Article X. Organization Meeting

    Section 1. At the time application is made for a federal credit 
union charter, the subscribers to the organization certificate must 
meet for the purpose of electing a board of directors and a credit 
committee, if applicable. Failure to commence operations within 60 days 
following receipt of the approved organization certificate is cause for 
revocation of the charter unless a request for an extension of time has 
been submitted to and approved by the Regional Director.
    Section 2. The subcribers elect a chair and a secretary for the 
meeting. The subscribers then elect from their number, or from those 
eligible to become members of this credit union, a board of directors 
and a credit committee, if applicable, all to hold office until the 
first annual meeting of the members and until the election and 
qualification of their respective successors. If not already a member, 
every person elected under this section or appointed under section 3 of 
this article, must qualify within 30 days by becoming a member. If any 
person elected as a director or committee member or appointed as a 
supervisory committee member does not qualify as a member within 30 
days of such an election or appointment, the office will automatically 
become vacant and be filled by the board.
    Section 3. Promptly following the elections held under the 
provisions of section 2 of this article, the board must meet and elect 
the board officers who will hold office until the first meeting of the 
board of directors following the first annual meeting of the members 
and until the election and qualification of their respective 
successors. The board also appoints a supervisory committee at this 
meeting as provided in Article IX, section 1, of these bylaws and a 
credit committee, if applicable. The members so appointed hold office 
until the first regular meeting of the board following the first annual 
meeting of the members and until the appointment and qualification of 
their respective successors.

Article XI. Loans and Lines of Credit to Members

    Section 1. Loans may only be made to members and for provident or 
productive purposes in accordance with applicable law and regulations.
    Section 2. Any member whose loan is delinquent may be required to 
pay a late charge as determined by the board of directors.

Article XII. Dividends

    Section 1. The board establishes dividend periods and declares 
dividends as permitted by the Act and applicable regulations.

Article XIII. Deposit of Funds

    Section 1. All funds of this credit union, except for petty cash 
and cash change funds, must be deposited in such qualified depository 
or depositories from among those authorized by applicable law and 
regulations as the board may from time to time by resolution designate; 
and must be so deposited not later than the __________ (fill in number) 
banking day after their receipt: provided, however, that receipts in 
the aggregate of $__________ (fill in number) or less may be held as 
long as 1 week before they are deposited.

Article XIV. Expulsion and Withdrawal

    Section 1. A member may be expelled only in the manner provided by 
the Act. Expulsion or withdrawal will not operate to relieve a member 
of any liability to this credit union. All amounts paid in on shares by 
expelled or withdrawing members, prior to their expulsion or 
withdrawal, will be paid to them in the order of their withdrawal or 
expulsion, but only as funds become available and only after deducting 
any amounts due to this credit union.

Article XV. Minors

    Section 1. Shares may be issued in the name of a minor.

Article XVI. General

    Section 1. All power, authority, duties, and functions of the 
members, directors, officers, and employees of this credit union, 
pursuant to the provisions of these bylaws, must be exercised in strict 
conformity with the provisions of applicable law and regulations, and 
of the charter and the bylaws of this credit union.
    Section 2. The officers, directors, members of committees and 
employees of this credit union must hold in confidence all transactions 
of this credit union with its members and all information respecting 
their personal affairs, except when permitted by state or federal law.
    Section 3. Notwithstanding any other provisions in these bylaws, 
any director or committee member of this credit union may be removed 
from office by the affirmative vote of a majority of the members 
present at a special meeting called for the purpose, but only after an 
opportunity has been given to be heard.
    Section 4. No director, committee member, officer, agent, or 
employee of this credit union may participate in any manner, directly 
or indirectly, in the deliberation upon or the determination of any 
question affecting his or her pecuniary or personal interest or the 
pecuniary interest of any corporation, partnership, or association 
(other than this credit union) in which he or she is directly or 
indirectly interested. In the event of the disqualification of any 
director respecting any matter presented to the board for deliberation 
or determination, such director must withdraw from such deliberation or 
determination; and in such event the remaining qualified directors 
present at the meeting, if constituting a quorum with the disqualified 
director or directors, may exercise with respect to this matter, by 
majority vote, all the powers of the board. In the event of the 
disqualification of any member of the credit committee, if applicable, 
or the supervisory committee, such committee member must withdraw from 
such deliberation or determination.
    Section 5. Copies of the organization certificate of this credit 
union, its bylaws and any amendments thereof, and any special 
authorizations by the Administration must be preserved in a place of 
safekeeping. Copies of the organization certificate and field of 
membership amendments should be attached as an appendix to these 
bylaws. Returns of nominations and elections and proceedings of all 
regular and special meetings of the members and directors must be 
recorded in the minute books of this credit union. The minutes of the 
meetings of the members, the board, and the committees must be signed 
by their respective chairmen or presiding officers and by the persons 
who serve as secretaries of such meetings.
    Section 6. All books of account and other records of this credit 
union must be available at all times to the directors and committee 
members of this credit union. The charter and bylaws of this credit 
union must be made available for inspection by any member and, if the 
member requests a copy, it will be provided for a reasonable fee.
    Section 7. Members must keep the credit union informed of their 
current address.
    Section 8. (a) The credit union may elect to indemnify to the 
extent authorized by (check one)

[ ] law of the state of __________:
[ ] Model Business Corporation Act:

the following individuals from any liability asserted against them and 
expenses reasonably incurred by them in connection with judicial or 
administrative proceedings to which

[[Page 55773]]

they are or may become parties by reason of the performance of their 
official duties (check as appropriate).

[ ] current officials
[ ] former officials
[ ] current employees
[ ] former employees

    (b) The credit union may purchase and maintain insurance on behalf 
of the individuals indicated in (a) above against any liability 
asserted against them and expenses reasonably incurred by them in their 
official capacities and arising out of the performance of their 
official duties to the extent such insurance is permitted by the 
applicable state law or the Model Business Corporation Act.
    (c) The term ``official'' in this bylaw means a person who is a 
member of the board of directors, credit committee, supervisory 
committee, other volunteer committee (including elected or appointed 
loan officers or membership officers), established by the board of 
directors.

Article XVII. Amendments of Bylaws and Charter

    Section 1. Amendments of these bylaws may be adopted and amendments 
of the charter requested by the affirmative vote of two-thirds of the 
authorized number of members of the board at any duly held meeting of 
the board if the members of the board have been given prior written 
notice of the meeting and the notice has contained a copy of the 
proposed amendment or amendments. No amendment of these bylaws or of 
the charter may become effective, however, until approved in writing by 
the NCUA Board.

Article XVIII. Definitions

    Section 1. When used in these bylaws the terms:
    (a) ``Act'' means the Federal Credit Union Act, as amended.
    (b) ``Administration'' means the National Credit Union 
Administration.
    (c) ``Board'' means board of directors of the federal credit union.
    (d) ``NCUA Board'' means the Board of the National Credit Union 
Administration.
    (e) ``Regulation'' or ``regulations'' means rules and regulations 
issued by the NCUA Board.
    (f) ``Applicable law and regulations'' means the Federal Credit 
Union Act and rules and regulations issued thereunder or other 
applicable federal and state statutes and rules and regulations issued 
thereunder as the context indicates (such as The Higher Education Act 
of 1965).
    (g) ``Paid in and unimpaired capital,'' as of a given date, means 
the balance of the paid-in share accounts as of such date, less any 
losses that may have been incurred for which there is no reserve or 
which have not been charged against undivided earnings.
    (h) ``Surplus,'' as of a given date, means the credit balance of 
the undivided earnings account on such date, after all losses have been 
provided for and net earnings or net losses have been added thereto or 
deducted therefrom, as the case may be. Reserves are not considered as 
a part of the surplus.
    (i) ``Share'' or ``shares'' means all classes of shares and share 
certificates that may be held in accordance with applicable law and 
regulations.
    Section 2. If included in the definition of the field of membership 
in the organization certificate charter of this credit union, the term 
or expressions:
    (a) ``Organizations of such persons'' means an organization or 
organizations composed exclusively of persons who are within the field 
of membership of this credit union.
    (b) ``Immediate family member'' eligibility is limited to spouse, 
child, sibling, parent, grandparent or grandchild. For the purposes of 
this definition, immediate family member includes stepparents, 
stepchildren, stepsiblings, and adoptive relationships. A credit union 
may adopt a more restrictive definition of this term by deleting this 
definition from its bylaws and replacing it with its own more 
restrictive definition.
    (c) ``Household'' is defined as persons living in the same 
residence maintaining a single economic unit. A credit union may adopt 
a more restrictive definition of this term by deleting this definition 
from its bylaws and replacing it with its own more restrictive 
definition.

[FR Doc. 99-26716 Filed 10-13-99; 8:45 am]
BILLING CODE 7535-01-P