Credit Union Alert – NCUA Extends Flexibility for Federal Credit Unions | Kaufman & Canoles

NCUA Extends Flexibility for Federal Credit score Unions
NCUA has issued Letter to Federal Credit Unions 21-FCU-06. In its letter, NCUA notes the continued want for flexibility when conducting conferences throughout the COVID-19 pandemic and has prolonged the power for federal credit score unions to conduct conferences nearly in 2022, offered the federal credit score union has adopted a particular bylaw modification permitting for digital conferences.

Background
NCUA offered the flexibleness for federal credit score unions to conduct digital annual and particular member conferences in Letter to Federal Credit Unions, 20-FCU-02, “NCUA Actions Related to COVID-19 – Annual Meeting Flexibility” and subsequently prolonged the flexibleness for normal board of administrators conferences held in 2021 in Letter to Federal Credit Unions, 20-FCU-04, “Federal Credit Union Meeting Flexibility During the COVID-19 Pandemic.”

In all three Letters to Federal Credit score Unions, NCUA notes that earlier than a federal credit score union might conduct digital conferences, a federal credit score union might undertake, at any time, by a two-thirds vote of its Board of Administrators, the next bylaw modification to Article IV with out present process additional bylaw approval processes with the NCUA:

Part 6. Emergency exception to in-person quorum requirement. This credit score union might maintain its annual assembly of the members, the required in-person common assembly of the board of administrators underneath Article VI, and particular member conferences for licensed functions aside from member expulsion underneath Article XIV of those bylaws, nearly and with out an in-person quorum if all the following situations apply and are licensed in assembly minutes by a decision of the vast majority of a quorum of the board of administrators:

• Not less than one of many following is situated in an space the place a federal, state, or native authority has declared a state of emergency or main catastrophe:
  • all or a part of a group the credit score union serves; or
  • the credit score union’s headquarters.
• The credit score union has the technological capability to facilitate digital assembly attendance, voting, and participation.
• Members obtain a minimum of seven days’ advance discover of the change of a member assembly to a digital assembly format and applicable directions for be a part of, take part, and vote throughout the digital assembly.
• The NCUA has issued common or particular steering notifying the credit score union that it’s applicable to invoke this bylaw provision.

A federal credit score union might select to undertake the modification with or with out the underlined language associated to conferences of the board of administrators. You will need to observe {that a} federal credit score union selecting to undertake the modification (with or with out the language associated to board of director’s conferences) ought to make sure that the cross-citations conform to their model of the bylaws.

NCUA additionally gives examples of digital choices to incorporate webcasts, teleconferences, digital assembly rooms or comparable implies that permits members to pay attention, vote as needed, and take part.

In its most up-to-date letter, NCUA reminds federal credit score unions to confer with 20-FCU-02, “NCUA Actions Associated to COVID-19 – Annual Assembly Flexibility” for particular instructions on how a federal credit score union can postpone its annual assembly, amend the date of its annual assembly through the use of the fill-in-the-blank provision in its bylaws, and quorum necessities.

For elections, the federal credit score union bylaws permit 4 choices. If a credit score union’s board or administration determines {that a} completely different choice could be extra handy, they might amend the credit score union’s bylaws with the vote of two-thirds of the administrators. If a federal credit score union holds an all-virtual annual or particular member assembly with digital voting, nevertheless, it should undertake Possibility A4.

Federal Credit score Union Bylaws additionally allow flexibility for distributing member notices throughout COVID-19. Article IV, § 2 of the bylaws gives that notices for member conferences could also be despatched by electronic message to members who’ve opted to obtain statements and notices electronically. As such, a paper mailing is just not required for all members, solely these members who haven’t opted to obtain digital statements and notices.

Motion Required
Earlier than a federal credit score union conducts member conferences and common board of administrators conferences it should undertake the bylaw modification, by a two-thirds vote of the board of administrators. There may be not a requirement for NCUA to approve this modification.