Compliance Blog

If you’ve read our blogs on the 2019 update of NCUA’s FCU Bylaws, you know about the updates regarding expulsion and limitation of services, bylaw amendments, meetings and elections, directors and the board, and some FAQs.

If an FCU is onboard with some or all of NCUA’s updated FCU Bylaws, it may want to consider adopting them. While NCUA encourages FCUs to adopt the revised bylaws, FCUs are in no way required to do so. There is no automatic updating of an individual CUs bylaws and the board can decide to update the bylaws, in whole or in part, but is not required to. 12 CFR Part 701, App. A, Introduction (effective January 2, 2020).

Adopting the Bylaws

The instructions to the FCU Bylaws located in Appendix A to Part 701 are pretty explicit that there are only two kinds of amendments: changes to fill-in-the-blank provisions that do not require NCUA approval and everything else, which does require NCUA approval. See, 12 CFR Part 701, App. A, Bylaw Amendments (effective January 2, 2020).

However, there seems to be a third way that applies only to adopting the standard FCU Bylaws. The preamble seems to indicate that to adopt the new bylaws, a board resolution is sufficient: “The new bylaw amendments are simply a resource that is available to all FCUs, regardless of size. Except for newly chartered FCUs, there is nothing prescriptive or mandatory about this final rule. All FCUs are free to adopt the new bylaws, retain their current bylaws, or adopt some combination of the bylaws and their current bylaws. If an FCU elects to adopt the new version, that FCU only needs to adopt a board resolution to that effect.” 84 Fed. Reg. 53289 (Emphasis added).

NAFCU reached out to NCUA’s Office of General Counsel and they confirmed that a board resolution process is available to any FCU adopting either the entirety of the FCU Bylaws or just a single provision. However, this only applies if the FCU is adopting the provision or bylaws verbatim. Any language changes to the FCU Bylaws (for example, to bring them in conformity with the remainder of the FCU’s current bylaws) would be considered an amendment (rather than an adoption) and would trigger the amendment process set out in the instructions.

Posting the Bylaws Online

FCUs are required to make certain records, including the FCU’s bylaws, available to members with a proper purpose. This is memorialized in the bylaws in Article XVI, Section 6. The updated FCU Bylaws added a requirement to post the bylaws to the credit union’s website, if it has one. 12 CFR Part 701, App. A, Art. XVI, Sec. 6.

A new comment to this provision indicates that credit unions are not required to establish and maintain a website solely for this purpose. Further, the preamble states that the bylaws can be posted in a password protected member-only area of the website so that they are not available to the general public. Again, posting the bylaws on the website is not a requirement unless the FCU chooses to adopt the updated version of Article XVI, Section 6.