[Federal Register Volume 68, Number 103 (Thursday, May 29, 2003)]
[Notices]
[Pages 32127-32134]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-13340]


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NATIONAL CREDIT UNION ADMINISTRATION


Corporate Federal Credit Union Bylaws

AGENCY: National Credit Union Administration (NCUA).

ACTION: Final corporate Federal credit union bylaws.

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SUMMARY: NCUA is updating the corporate Federal credit union (FCU) 
bylaws. This action is necessary because several of the bylaws had 
become outdated or obsolete. The amendments modernize and clarify the 
corporate FCU bylaws.

DATES: The final bylaws are effective June 30, 2003.

FOR FURTHER INFORMATION CONTACT: Kent D. Buckham, Director, Office of 
Corporate Credit Unions (OCCU), National Credit Union Administration, 
1775 Duke Street, Alexandria, Virginia 22314-3428 or telephone: (703) 
518-6640.

SUPPLEMENTARY INFORMATION: 

Background

    Section 108 of the Federal Credit Union Act (the Act) requires the 
NCUA Board to prepare bylaws to be used by all federal credit unions 
(FCUs). 12 U.S.C. 1758. The Garn-St Germain Depository Institutions Act 
of 1982 authorized the NCUA Board to differentiate the activities of 
corporate credit unions (corporates) from natural person credit unions 
through rules, regulations, and orders of the NCUA Board. In 
recognition of the unique mission and operating needs of corporates, 
the NCUA Board, in coordination with the corporate credit union 
community, developed and adopted a set of standard Corporate Federal 
Credit Union Bylaws (bylaws) in March of 1983. Since then, the only 
revisions were in 1994, when the Board revised the provisions relating 
to Meetings of Members and Elections. 59 FR 59357, 59361 (November 17, 
1994).
    NCUA issued proposed bylaws in December 2002 to update, modernize 
and clarify the bylaws. 67 FR 79152 (December 27, 2002). In the past 20 
years, significant regulatory, economic and institutional changes have 
taken place. The proposed revisions to the bylaws reflected the current 
legal, technological, and financial environment within which corporate 
credit unions operate. NCUA received 10 comments to the proposal. The 
commenters were supportive of the proposal, but raised several minor 
issues.

Summary of Comments to the Proposed Corporate FCU Bylaws

    On December 19, 2002, the Board issued a Notice and Request for 
Comment on the Corporate Federal Credit Union Bylaws. Id. The Board 
received ten comments regarding the proposed bylaws: four from 
corporate FCUs, one from an FCU, one from a state chartered credit 
union, three from credit union trade organizations and one from a 
credit union league. The commenters supported NCUA's effort in updating 
the bylaws. They expressed appreciation for NCUA's solicitation of 
comments in regard to the proposed revisions to the bylaws. Generally, 
those commenting commended the agency's proposal to modernize the 
bylaws, making them more user friendly, removing outdated items and 
utilizing ``plain English.'' Two commenters suggested the dynamic 
working environment of corporates warrants a more frequent review of 
selected portions of the bylaws. Below is a summary of the comments.

[[Page 32128]]

General Areas for Review

    NCUA's request for comment states that while corporates are 
strongly encouraged to adopt any final revised bylaws, they are not 
required to do so and may instead continue to follow currently approved 
bylaws or adopt only portions of the revised bylaws. Six commenters 
supported the flexibility proposed in the supplementary information 
section. Five of those six commenters requested that NCUA clarify that 
NCUA approval is not required to adopt portions of the revised bylaws. 
As the Board stated in the proposed bylaws, ``in an effort to achieve 
maximum participation,'' the Board will permit corporate FCUs ``to 
adopt portions of the revised bylaws.'' Id. at 79153. NCUA Board 
approval is not required.

Specific Areas for Review

Article III--Membership

Members Who Leave the Field of Membership
    One commenter supported section 4 of the proposed bylaws that 
states a member of a corporate may remain a member of that corporate 
until the person or entity withdraws or is expelled. The commenter 
indicated that the proposed update brings the bylaws in line with 
NCUA's field of membership (FOM) policy allowing Federal corporates to 
apply for national FOMs. A trade association commenter also supported 
the proposed provision in this section permitting a corporate to 
restrict services to a member no longer in the FOM and addressing the 
termination of membership in the case of a member of a corporate 
converting to another form of financial institution. This section is 
retained as proposed.

Article IV--Shares of Members

Par Value
    One commenter opposed the proposed revision in section 1 that 
eliminates the alternative of paying for a share in a corporate in 
installments and instead requires the purchase of a share to be made at 
the time of subscription. The commenter urged NCUA to retain the 
current bylaw provision giving credit unions the option to pay for 
corporate shares either in installments or at the time of subscription. 
The Board considered the comment but because for corporates, the 
business practicality of permitting the payment of shares in 
installments is unduly burdensome, it is retaining this revision as 
proposed.

Article V--Meetings of the Members

Special Meetings and Quorum
    One commenter supported the provisions that relax both member 
requirements for calling a special meeting (section 3) and establishing 
a quorum (section 4). The commenter indicated that these proposed 
provisions will provide member credit unions with greater opportunity 
to provide input into decisions on special matters as they arise. This 
section is retained as proposed.

Article VI--Elections

Selection of Nominating Committee
    In section 1 of this article, the Board proposed changing the term 
``candidate'' to the term ``member'' in regard to nominating parties 
for vacant positions relative to elections. One commenter, a corporate 
credit union opposed the change in terms. The commenter noted its 
corporate does not have any members who are natural persons. All of the 
corporate's members are organizational members. The commenter believes 
the proposed change in terms would mean the corporate's nominating 
committee would be required to nominate a credit union or other 
organizational member for each upcoming vacancy on the board of 
directors. The Board agrees with the corporate's concern and will 
reinstate the term ``candidate'' in the final version of the revised 
bylaws.
Election Conduct
    Five commenters supported the addition of electronic balloting, one 
citing that it will enhance efficiency of the operations of corporates. 
This section is retained as proposed.
Voting by Trustee
    Section 4 prohibits voting by proxy and permits a member other than 
a natural person to vote through a designated agent. The Board is 
deleting the sentence that prohibits voting by a trustee because it has 
no applicability to corporates.
Reporting of Appointments and Election Results
    Two commenters disagreed with the proposed addition of section 5 to 
this article. It requires corporates to notify NCUA of the names and 
addresses of certain officials and committee members. The commenters 
believe that the requirement is important but adequately addressed in 
the Federal Credit Union Act and need not be duplicated in the bylaws. 
This section was adapted from the Federal Credit Union (FCU) Bylaws for 
natural person FCUs. FCU Bylaws, Article V, section 6, October 1999. 
The Board considered the comment but believes that this issue is of 
sufficient importance to warrant its inclusion in the bylaws. The Board 
is retaining this revision as proposed.

Article VII--Board of Directors

Number
    One commenter suggested a revision to the proposed wording of 
section 1. The first sentence states: ``The board consists of ---- 
members elected from among the members and/or designated 
representatives of members.'' The corporate proposed changing the 
``and/or'' to ``and''. The commenter believes that the proposed change 
reflects the current practice of corporates to have a certain number of 
board members who are also designated representatives of members. The 
Board considered the corporate's comment but believes the current 
provision provides needed flexibility. The Board is retaining this 
section of the bylaws as proposed.
Suspension of Supervisory Committee Members
    One commenter suggested a revision to the proposed wording of 
section 8. Section 8 provides that members of a corporate will decide, 
at a special meeting held not fewer than 7 nor more than 14 days after 
the suspension of a supervisory committee member whether the member 
will be removed or restored. The corporate believes that the 14 day 
time frame is far too short to provide adequate notice to members of a 
special meeting and recommends increasing this time frame to 30 days. 
The Board is not persuaded by the rationale offered, given the current 
technological alternatives available for providing timely notification. 
The Board is retaining this section of the bylaws as proposed.
Miscellaneous
    Three commenters are concerned about corporate employees leaving 
the company's employ and then running for the corporate board. The 
basis for the concern is that former employees possess inside 
information and could potentially use this knowledge to inappropriately 
influence other board members. The commenters suggested NCUA consider 
adding a bylaw provision to this article that would prohibit employees 
from serving on the corporate's board of directors for a minimum of two 
years after termination of employment. The Board considered the 
comments and concluded that it is not appropriate to limit through a 
standard bylaw, those individuals who

[[Page 32129]]

are eligible to run for election. The Board believes this issue can be 
addressed through the request and approval of a nonstandard bylaw 
amendment if it is of particular concern to an individual corporate.

Article VIII--Board of Directors, Executive Committee, Asset/Liability 
Management Committee (ALCO), and Management Staff

Board Officers
    Section 1 of this article identifies the titles of the board 
officers of a corporate. The titles include ``executive officer'' and 
``assistant executive officer''. The proposed revision to Article VII, 
section 4, includes the terms ``chair'' and ``ranking vice-chair'' when 
referring to board officers. Four commenters recommended that the terms 
be amended in this Article to eliminate confusion in circumstances 
where corporate credit union presidents are often corporate credit 
union chief executive officers as well. The Board agrees. Revisions 
have been made to the applicable sections eliminating confusion 
relative to board officer titles.
Financial Officer
    Section 5 provides that the financial officer is responsible for 
the management of the corporate unless the board employs a separate 
management official. A commenter noted that in the FCU Bylaws, it 
states that ``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.'' FCU Bylaws, Article 
VII, section 6 (emphasis added). The commenter explained that the 
underlined language is missing from NCUA's proposed revision to the 
corporate Federal credit union bylaws. Due to the complexity of today's 
corporate credit union operations, the commenter is concerned about a 
board member having the power to also manage the corporate. The 
commenter strongly recommended that the underlined language from the 
FCU Bylaws be inserted into this section. It is pertinent to note that 
in section 6, Manager Other than Financial Officer, the underlined 
language is included. The Board agrees with the commenter and the 
underlined phrase will be inserted into section 5.
Manager Other Than Financial Officer
    Section 6 of this article allows the board to employ a management 
official who is not a member of the board. Two commenters are concerned 
about a corporate board member becoming chief executive officer of a 
corporate credit union immediately after stepping down from the board. 
They believe the bylaws should prohibit this activity because of the 
potential for conflicts between the board member and the corporate's 
remaining management and the potential undue influence that such a 
board member might exert on the decision to terminate the prior chief 
executive officer. The commenters suggested NCUA consider a proposed 
revision prohibiting this activity. They suggested adopting as part of 
the corporate bylaws a 1991 standard bylaw amendment for natural person 
FCUs that states ``no director may be a paid employee of the credit 
union for a minimum of 2 years from the date the official terminates 
his/her position as a director unless the employee position to be 
filled exists as the result of a death or disability''. Federal Credit 
Union Standard Bylaw Amendments and Guidelines, October 1991. This 
provision is not in the current version of the FCU Bylaws for natural 
person credit unions. The Board considered the comments and concluded 
that, rather than having this restrictive policy apply to all 
corporates, this issue should be addressed through the request and 
approval of a nonstandard bylaw amendment if it is of particular 
concern to an individual corporate.

Article X--Supervisory Committee

Suspension of Directors, Executive Officers or Credit Committee Members
    The commenter suggesting a revision to the timing for notices in 
current and proposed Article VII, section 8 recommended a corresponding 
change to section 5 of this article. Section 5 provides that the 
members of a corporate will decide, at a special meeting held not fewer 
than 7 nor more than 14 days after the supervisory committee suspends a 
director, executive officer, or member of the credit committee, whether 
the director, officer or member will be removed or restored. The 
commenter believes that the 14-day time frame is far too short to 
provide adequate notice to members of a special meeting and recommends 
increasing this time frame to 30 days. The Board is not persuaded by 
the rationale offered given the current technological alternatives 
available for providing timely notification. The Board is retaining 
this section of the bylaws as proposed.

Article XII--Operations Following an Attack on the United States or 
Catastrophic Occurrence Otherwise Rendering the Corporate Credit Union 
Inoperable

    One commenter recommended deleting this provision of the bylaws to 
mirror the deletion made to the FCU Bylaws for natural person credit 
unions in October 1999. Another commenter, a trade association, 
remarked that its members do not believe this provision should be a 
bylaw topic. Both commenters believe contingency planning efforts are 
better left as an operational and supervisory issue rather than in a 
bylaw. The Board considered the comments but believes that this issue 
is of sufficient importance to warrant its inclusion in the bylaws. The 
Board is retaining this revision as proposed.
    One commenter supported the addition of the ``catastrophic 
occurrence or contingency situation'' since they see that type of 
occurrence to be more likely to cause serious disruption of services 
than an attack on the United States. Another commenter, a trade 
association supported NCUA's provision regarding contingency planning 
in the event of attack on the United States or other catastrophic 
event. These sections are retained as proposed.
Contingency Plan
    One commenter specifically disagreed with the addition of the 
(third) new section that requires the corporate credit union to 
maintain and periodically test an organization-wide contingency plan. 
The corporate believes this requirement is an operational matter that 
is adequately addressed in Sec.  704.4(a) and (b) of the regulations. 
12 CFR 704.4(a) and (b). The Board believes that this issue is of 
sufficient importance to warrant its inclusion in the bylaws. The Board 
is retaining this revision as proposed.

Indemnification

    Four commenters suggested addressing indemnification in the bylaws. 
While this issue is addressed in section 701.33(c) of the NCUA Rules 
and Regulations, two corporates commenting on this issue had adopted an 
indemnification (nonstandard bylaw amendment) provision in their 
bylaws. The corporates' rationale for adopting an indemnification bylaw 
was to guard against the possibility that, after a dispute at the 
corporate that led to the departure of directors or other indemnified 
officials, a subsequent board of directors might try to eliminate the 
indemnification rights of the

[[Page 32130]]

departed personnel through changing policy. If the indemnification 
provisions are set forth in the bylaws, any such retroactive removal of 
the provision would have to be approved by NCUA. The Board believes 
that this issue is of sufficient importance to warrant its inclusion in 
the bylaws. The final revised bylaws include an indemnification 
provision modeled after the FCU Bylaws.

Agency Publication of Final Bylaws and Adoption by Corporates

    The final bylaws provide a user friendly document for the internal 
governance of corporate FCUs. Every effort was made to use plain 
English in the bylaws. The final bylaws are identical to the proposed 
bylaws except as noted above in the summary of comments. A table of 
contents will be provided in the agency's publication of the bylaws 
that is distributed to corporates.
    Corporate FCUs are strongly encouraged to adopt the final revised 
bylaws, but are not required to do so and may continue to use their 
previously approved bylaws. The Board, in an effort to achieve maximum 
participation by corporate FCUs, will allow them to adopt portions of 
the revised bylaws, if a corporate FCU finds that adoption of the 
entire revised bylaws is impracticable. The Board cautions corporate 
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. Although the Act requires corporate FCUs to use the bylaws 
published by NCUA, corporate FCUs will continue to have the flexibility 
to request a nonstandard bylaw amendment if the need arises. 12 U.S.C. 
1758. A corporate FCU must obtain approval from the Director of OCCU to 
adopt a nonstandard bylaw.

    By the National Credit Union Administration Board on May 22, 
2003.
Becky Baker,
Secretary of the Board.

Bylaws

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

Article I. 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) ``Regulation'' or ``regulations'' means rules and 
regulations issued by the National Credit Union Administration.
    (d) ``Share'' or ``shares'' means any amount deposited for the 
credit of a member or other account holder and includes, but is not 
limited to, share accounts, share certificate accounts, share draft 
accounts, and nonmember accounts (however denominated) permitted by 
law.
    (e) ``Board'' means board of directors of this corporate credit 
union.
    Section 2. If included in the definition of the field of 
membership in the organization certificate (charter) of this 
corporate credit union, the term or expression ``organizations of 
such members'' means an organization or organizations composed of 
entities that are within the field of membership of this corporate 
credit union.

Article II. Name-Purposes

    Section 1. The name of this corporate credit union is as stated 
in section 5 of the charter (approved organization certificate) of 
this corporate credit union.
    Section 2. The purpose of this corporate credit union is to 
foster and promote the economic well-being, growth and development 
of its members through effective funds management, interlending, 
investment services and such other activities and services that may 
be beneficial to its members and are authorized by Act and 
regulations.

Article III. Membership

    Section 1. The field of membership of this corporate credit 
union is limited to that stated in section 5 of its charter.
    Section 2. Applications for membership eligibility under section 
5 of the charter must be signed by the applicant on forms approved 
by the board. Upon approval of the application and upon subscription 
to a share with par value as established by the board in Article IV 
and the payment of a uniform entrance fee, if required by the board, 
the applicant is admitted to membership. Applications must be 
approved by a majority of the directors, a majority of the members 
of a duly authorized executive committee, or by a membership 
officer. If a membership application is denied, the reasons must be 
furnished in writing to the applicant upon written request.
    Section 3. Membership of any member whose account contains less 
than the minimum required in Article IV, section 1 may be terminated 
in accordance with procedures established by the board of directors.
    Section 4. Once a person or entity becomes a member that person 
or entity may remain a member until the person or organization 
chooses to withdraw or is expelled in accordance with the Act. A 
corporate credit union that wishes to restrict services to members 
no longer within the field of membership should specify the 
restrictions in this section. In the case of a member credit union 
that converts to another form of financial institution outside the 
field of membership, membership ceases at a mutually agreeable time 
not to exceed six months from the conversion date.
    Section 5. A member may be expelled only in the manner provided 
by the Act.

Article IV. Shares of Members

    Section 1. The par value of each share will be ------ (as 
determined by the board) and payable at the time of the 
subscription.
    Section 2. Shares of a member may be transferred among the 
member's accounts or to another member in such manner as the board 
may prescribe.
    Section 3. Unless otherwise provided by the board, shares may be 
withdrawn on any day when payment on shares may be made; provided 
that no member may withdraw shareholdings that are pledged as 
required security on loans without the written approval of the 
credit committee or a loan officer, except to the extent that such 
shares exceed the member's total primary and contingent liability to 
the corporate credit union.

Article V. Meetings of Members

    Section 1. The annual meeting of the members must be held at 
such time and place as the board will determine and announce in the 
notice prescribed in section 2 of this Article.
    Section 2. At least 75 days before the date of any annual 
meeting or 10 days before the date of any special meeting of the 
members, the secretary must give written notice to each member 
appearing on the records of this corporate credit union. Such notice 
must state the date, time, and location of the meeting and such 
other information as the board of directors determine consistent 
with these bylaws. 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. The notice for the annual meeting will advise the members 
of the deadlines for elections.
    In the case of members who have previously consented to the 
electronic delivery of documents, said notice may be sent by 
electronic mail to the e-mail address that appears on the records of 
the corporate credit union.
    Section 3. Special meetings of the members may be called by the 
chair or the supervisory committee as provided in these bylaws, or 
by applicable law or regulation, and may be held at any place 
permitted for the annual meeting. A special meeting must be called 
by the chair within 45 days of receipt of a request of 5 percent of 
the members as of the day of request; provided that a request of no 
more than 100 members is required. Notice must be given as provided 
in section 2 of this article and must state the purpose for which it 
is to be held. No business other than that related to this purpose 
may be transacted at the meeting.
    Section 4. The lesser of 15 members or 20 percent of the 
membership constitutes a quorum at any annual or special meeting. If 
a quorum is not present on the date first designated for the 
meeting, an adjournment may be taken to a date not fewer than 7 days 
or more than 30 days thereafter, and a second notice will be given 
to all members setting forth the date, time, and place of the 
adjourned meeting. The members then present constitute a quorum, 
regardless of the number of members present.

[[Page 32131]]

Article VI. Elections

    Section 1. At least 120 days before each annual meeting, the 
board of directors will appoint a nominating committee of not fewer 
than three members. It is the duty of the nominating committee to 
nominate at least one candidate for each vacancy, including any 
unexpired term vacancy, for which elections are being held, and to 
determine that the candidates 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 
corporate 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 5 percent of the 
members with a minimum of 5 and a maximum of 100.
    Notice may be accomplished as prescribed in Article V, section 
2.
    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 corporate credit union at least 40 days 
prior to the annual meeting.
    In carrying out their responsibilities, the nominating committee 
and board of directors must ensure that the requirements of Sec.  
704.14 (a) of the regulations are satisfied.
    Section 2. All elections are determined by plurality vote. 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 corporate 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 are printed in order as determined 
by the draw of lots. 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 corporate 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 corporate credit 
union account number as they are registered in the electronic 
balloting system. It is the duty of the tellers 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 by the secretary 
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 corporate 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 corporate credit union account number 
of the voter.
    (4) One mailing envelope in which the voter, pursuant to 
instructions provided with the mailing 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.
    (6) It is the duty of the tellers to verify, or cause to be 
verified, the name and corporate 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 by the secretary 
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. No voting representative may serve as a voting 
representative of more than one member. Irrespective of the number 
of shares, no member has more than one vote.
    Section 5. The names and addresses of members of the board, 
board officers, executive committee, and members of the credit 
committee, if applicable, and supervisory committee must be 
forwarded to NCUA in accordance with the Act and regulations in the 
manner as may be required by NCUA.

Article VII. Board of Directors

    Section 1. The board consists of ---- members elected from among 
the members and/or designated representatives of members. The number 
of directors may be changed to an odd number not fewer than five 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 corporate credit 
union.
    Section 2. Regular terms of office for directors must be periods 
of either 1, 2 or 3 years as the board determines; provided 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, so that approximately an equal number of 
regular terms must expire at each annual meeting.
    Section 3. Any vacancy on the board, credit committee, or 
supervisory committee

[[Page 32132]]

will be filled 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 4. 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. At least 7 days prior 
to each meeting, the secretary will cause the following information 
to be distributed to each director:
    (a) Minutes of the last meeting;
    (b) Reports of officers, standing committees, or of any special 
committee;
    (c) Special orders, or matters which have been assigned 
priority; and
    (d) Any written information on unfinished business or new 
business that has been given to the secretary by any director.
    Each participant of a teleconference meeting at the next 
regularly convened meeting of the board at which the participant is 
present must sign minutes of audio or video teleconference meetings.
    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 5. The board has the general direction and control of 
the affairs of this corporate credit union and is responsible for 
establishing programs to achieve the purposes of this corporate 
credit union as stated in Article II, section 2, of these bylaws. 
While the board may, as authorized in the bylaws, delegate the 
performance of administrative duties, the board is not relieved from 
its responsibility for their performance.
    Section 6. A majority of the number of directors constitutes a 
quorum for the transaction of business at any meeting thereof, but 
fewer than a quorum may adjourn from time to time until a quorum is 
in attendance.
    Section 7. If a director or credit committee member fails to 
attend three consecutive regular meetings of the board or credit 
committee; respectively, or otherwise fails to perform any of the 
duties devolving upon him/her as a director or credit committee 
member, his/her office may be declared vacant by the board and the 
vacancy filled as herein provided. 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 Asset/ Liability Management Committee (ALCO) member, or 
credit committee member is absent, disqualified, or otherwise unable 
to perform the duties of his/her office, the board may, by 
resolution, designate another member of this corporate credit union 
to act temporarily in his/her place. The board may also, by 
resolution, designate another member or members of this corporate 
credit union to act on these committees, when necessary, in order to 
attain a quorum.
    Section 8. Any member of the supervisory committee may be 
suspended by a majority vote of the board of directors. The members 
of this corporate 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.
    Section 9. No member of the board of directors may receive any 
compensation or benefit solely as a result or by virtue of service 
as a member of the board of directors except for reimbursement for 
reasonable expenses incurred in the performance of official duties 
and as provided for in Article VIII of these bylaws.
    Section 10. The board of directors will determine that monthly 
financial statements are prepared showing the condition of this 
corporate credit union. These financial statements will be readily 
available to members on a monthly basis in a manner deemed 
appropriate by the board.

Article VIII. Board Officers, Executive Committee, Asset/Liability 
Management Committee (ALCO), and Management Staff

    Section 1. The board officers of this corporate credit union are 
comprised of a chair, one or more vice chairs, a financial officer, 
and a secretary, all of whom will be elected by the board and from 
their number. The board will determine the title and rank of each 
board officer and record them in the addendum to this article. One 
board officer, the ----------, may be compensated for his/her 
services to such extent as may be determined by the board. If more 
than one vice chair is elected, the board will determine their rank 
as first vice chair, second vice chair, and so on. The offices of 
financial officer and secretary only may be held by the same person. 
Unless removed as provided in these bylaws, the officers elected at 
the first meeting of the board will 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 will be elected at the first meeting 
of the board following the annual meeting of the members, which must 
be held not later than 7 days after the annual meeting. The elected 
officers will hold office until the first board meeting following 
the next annual meeting of the members and until the election and 
qualification of their respective successors; provided 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 will call and will preside 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 
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 available ranking vice chair has and may exercise 
all the powers, the authority, and the duties of the chair during 
the chair's absence or inability to act.
    Section 5. Unless the board employs a separate management 
official, the financial officer is responsible for the management of 
the corporate credit union under the control and direction of the 
board and has such authority and such powers as delegated by the 
board to conduct business from day to day. If actually managing the 
corporate credit union, the financial officer may be compensated as 
may be determined by the board. The financial officer may employ or 
designate one or more assistants, as well as other employees, and 
may authorize them to perform any of the duties devolving on the 
financial officer, including the signing of checks. When so 
designated by the financial officer or the board, any assistant may 
also act as financial officer during the temporary absence of the 
financial officer or in the event of the financial officer's 
inability to act.
    Section 6. The board may employ a management official who is not 
a member of the board and who is under the direction and control of 
the board, and has all of the duties, powers, rights and 
responsibilities of the financial officer described in section 5. 
The board determines the title and the rank of each management 
official and records them in the addendum to this article.
    Section 7. The secretary causes to be prepared and maintained 
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 promptly informs NCUA in writing 
of any change in the address of the office of this corporate credit 
union, or the location of its principal records. The secretary 
gives, or causes to be given, in the manner prescribed in these 
bylaws, proper notice of all meetings of the members, and performs 
such other duties as he/she may be directed 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 8. The board may appoint an executive committee of not 
fewer than three

[[Page 32133]]

directors to act for it with respect to specifically delegated 
functions and subject to such limitations as prescribed by the 
board.
    Section 9. The board may appoint one or more membership officers 
to approve applications for membership under such conditions as the 
board and these bylaws may prescribe. Such membership officer or 
officers may not be a person or persons authorized to disburse 
funds.
    Section 10. The board will appoint an ALCO composed of not less 
than three, including at least one board member, to have charge of 
making investments under rules and procedures established by the 
board.
    Section 11. No member of the executive committee, ALCO or 
membership officer may be compensated as such. Members of the 
executive committee, ALCO, and membership officers serve at the 
pleasure of the board of directors.

Addendum

    The title and rank of the board officers and management 
officials of this corporate credit union are as follows:
    (a) The chair is to have the title of ------------------.
    (b) The vice chair is to have the title of ------------.
    (c) The financial officer is to have the title of --------------
--.
    (d) The assistant financial officer is to have the title of ----
--------.
    (e) The recording officer is to have the title of --------------
--.
    (f) The assistant recording officer is to have the title of ----
--------.
    (g) The management official is to have the title of ------------
--.
    (h) The assistant management official is to have the title of --
------.

Article IX. Credit Committee

    Section 1. The board must determine whether or not this 
corporate credit union will have a credit committee, and if so, 
whether the committee members will be elected by the membership or 
appointed by the board. The board's determination is recorded in the 
addendum to this Article. If this corporate credit union has a 
credit committee, either elected or appointed, sections 2 through 7 
of this Article apply. If this corporate credit union does not have 
a credit committee, the board will establish by resolution the 
procedures for appointing loan officers, delegating authority to the 
loan officers, and for appeal of loan officer decisions to the board 
of directors in accordance with applicable law and regulation.
    Section 2. The credit committee consists of ------ members. 
Members of the credit committee must be selected from among the 
members of the corporate credit union and/or the designated 
representatives of members or qualified corporate credit union 
staff. The number of members of the credit committee may be changed 
to an odd number 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 corporate credit union.
    Section 3. Regular terms of office for credit committee members 
are for periods of either 1, 2, or 3 years as the board will 
determine; provided 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, so that approximately 
an equal number of regular terms expire at each annual meeting.
    Section 4. The credit committee chooses from their number a 
chairman 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 chairman and of secretary may be held by the same 
person.
    Section 5. The credit committee may, by majority vote of its 
members, appoint one or more loan officers to serve at its pleasure 
and delegate its powers to such loan officers.
    Section 6. The credit committee or loan officer must inquire 
into the financial condition of each loan applicant. No loan or line 
of credit will be made unless approved by the committee or a loan 
officer in accordance with applicable law and regulations.
    Section 7. Subject to the limits imposed by law, regulation, 
these bylaws, and the general policies of the board, the credit 
committee, or a loan officer, will determine the security, if any, 
required for each application and the terms of repayment.

Addendum

    (a) This corporate credit union (1) will, (2) will not (delete 
one) have a credit committee (date of board action ----------------
).
    (b) The members of the credit committee of this corporate credit 
union will be: (1) Elected by the members (2) appointed by the board 
of directors (delete one or indicate not applicable) (date of board 
action ----------------).

Article X. Supervisory Committee

    Section 1. The supervisory committee is appointed by the board 
from among the members and/or from among the members' designated 
representatives. The board determines the number of members on the 
committee, which may not be fewer than three nor more than five. No 
member of the credit committee or any employee of this corporate 
credit union may be appointed to the committee. Regular terms of 
committee members are for periods 1, 2, or 3 years as the board 
determines; provided that all regular terms are for the same number 
of years and until the appointment and qualification of successors. 
The regular terms expire at the first regular meeting of the board 
following each annual meeting.
    Section 2. The supervisory committee members choose from among 
their number a chairman 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 same person may 
hold the offices of chairman and of secretary.
    Section 3. The supervisory committee causes to be made such 
audits and to prepare and submit such written reports to the board 
and the members as are required by the Act and regulations.
    Section 4. The supervisory committee verifies or causes to be 
verified the accounts of members in accordance with the Act and 
regulations.
    Section 5. By unanimous vote, the supervisory committee may 
suspend until the next meeting of the members any director, 
executive officer, or member of the credit committee. In the event 
of any such suspension, the supervisory committee will call a 
special meeting of the members to act on said suspension, which 
meeting will be held not fewer than 7 nor more than 14 days after 
such suspension. The chairman of the committee will act as chairman 
of the meeting unless the members select another person to act as 
chairman.
    Section 6. By the affirmative vote of a majority of its members, 
the supervisory committee may, after notification to the board, call 
a special meeting of the members to consider any violation of the 
provisions of the Act or of the regulations, or of the charter, or 
of the bylaws of this corporate credit union, or to consider any 
practice of this corporate credit union the committee deems to be 
unsafe or unauthorized.

Article XI. General

    Section 1. The officers, directors, members of committees, and 
employees of this corporate credit union must hold in confidence all 
transactions of this corporate credit union with its members and all 
information respecting their business affairs, except when permitted 
by state or Federal law.
    Section 2. No director, committee member, officer, agent, or 
employee of this corporate credit union may participate in any 
manner, directly, or indirectly, in the deliberation upon or the 
determination of any question affecting his/her pecuniary interest 
or the pecuniary interest of any corporation, partnership, or 
association (other than this corporate credit union) in which he/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, ALCO or the supervisory committee, 
such committee member must withdraw from such deliberation or 
determination.
    Section 3. The board has the right, at any time, to impose fees 
for such services and activities, as it deems necessary or 
desirable.
    Section 4. (a) The corporate may elect to indemnify to the 
extent authorized by (check one) ( ) law of the state of -------- or 
( ) Model

[[Page 32134]]

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 they are or may become parties by reason of the performance of 
their official duties: (Check as appropriate) ( ) current officials, 
( ) former official, ( ) current employees, ( ) former employees.
    (b) The corporate 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 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, supervisory committee, other 
volunteer committee (including elected or appointed loan officers or 
membership officers) established by the board of directors.

Article XII. Operations Following an Attack on the United States or 
Catastrophic Occurrence Otherwise Rendering the Corporate Credit 
Union Inoperable

    Section 1. In the event of an attack upon the United States, or 
other catastrophic occurrence causing a contingency situation, the 
officers and employees of the corporate credit union will continue 
to conduct the affairs of the corporate credit union under such 
guidance from the directors as may be available and subject to 
conformance with any government directives during the emergency.
    Section 2. In the event of an attack upon the United States, 
catastrophic occurrence, or a contingency situation, of sufficient 
severity to prevent the conduct and management of the affairs and 
business of the corporate credit union by its regularly elected 
directors, officers, and properly constituted committees as 
contemplated by these bylaws, any three available members of the 
then incumbent board of directors will constitute a quorum of the 
board of directors for the full conduct and management of the 
affairs and business of the corporate credit union including the 
approval of loans to members if the regularly elected credit 
committee is not available. In the event of the unavailability at 
such time of three members of the board, the vacancies, in order to 
provide a quorum of three, will be filled by a succession list 
established by the board of directors.
    Section 3. The corporate credit union will maintain and 
periodically test an organization-wide contingency plan that 
addresses all reasonable emergency and disaster scenarios.
    This bylaw is subject to implementation by resolutions of the 
board of directors passed from time to time for that purpose, and 
any provisions of these bylaws (other than this section) and any 
resolutions which are contrary to the provisions of this section or 
to the provisions of any such implemented resolutions will be 
suspended until a regularly constituted board of directors can be 
obtained.

Article XIII. Amendments of Bylaws and Charter

    Section 1. Amendments of these bylaws may be adopted and 
amendments of the charter may be requested by the affirmative vote 
of two-thirds of the authorized number of members of the board at 
any duly held board meeting, 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 the bylaws or charter becomes effective until approved 
in writing by NCUA.

[FR Doc. 03-13340 Filed 5-28-03; 8:45 am]
BILLING CODE 7535-01-P