Compliance Blog

I, based on experience with a miniature Regina George, am unconvinced most minors understand the concept of “majority wins.” BUT if federal credit unions (FCUs) are prepared for annual renditions of “Hard Knock Life” every time a threenager doesn’t get the director she votes for, who am I to stop you?

At first glance, if a minor is a member of a FCU, then the minor is entitled to vote and hold a share account. It appears to align with this NCUA legal opinion letter, which explains how voting is a fundamental right of all credit union members:

“The Federal Credit Union Act (FCU Act) grants all members two basic rights: the right to maintain a share account and the right to vote at annual meetings. 12 U.S.C. §§1759, 1769. These rights cannot be suspended or terminated without following the process for expelling a member in the FCU Act. 12 U.S.C. §1764. Nothing in the FCU Act or the National Credit Union Administration's (NCUA) regulations, however, precludes an FCU from restricting the availability of certain services to members, provided the FCU has a rational basis for doing so and member have notice of the policy.” (Emphasis added.)

 We are clear that a minor’s membership may possibly be subject to some obstacles, including limitation of services, expulsion, or state law age of majority rules. We must also consider that FCU elections are not state or federal government elections, which explicitly have age requirements. 

 FCUs members are responsible for selecting a federal credit union’s board of directors (BOD). Individually, members have only one vote despite the number of shares held at the federal credit union. This ensures every member has a say in the overall direction of the credit union. If members do not like the direction the credit union is going, they can speak with their vote at the next annual election. Article II of the model bylaws outlines the basic qualifications for membership in federal credit unions.

Membership requirements in FCUs for minors are slightly more “hard knock life,” than for adult members as illustrated in this NAFCU FAQ (member-only). First, state law must allow minors to contract with the credit union. Second, the minor must be within the federal credit union’s field of membership, as stated in Section 5 of its charter, and possibly pay an entrance fee. And finally, the minor must pay the par value amount required for membership.

So, we’re done right? Tomorrow is here! No more hard knock life for Annie?!

There’s just one problem, Annie. NCUA opined that the BOD can set a minimum age requirement for voting in elections. The language is found in the model bylaws (Article V, section 7):

“The credit union may select the following option:

Section 7. Members must be at least ________years of age by the date of the meeting in order to vote at meetings of the members, sign nominating petitions, or sign petitions requesting special meetings. Members must be at least ________ years of age to hold elective or appointive office.”

In short, if a minor is permitted by state law to hold an account with an FCU, which under the FCU ACT may permit the minor to hold shares, the minor can vote in elections, UNLESS Agatha Hannigan (the BOD) pulls a fast one by setting a minimum age requirement in the bylaws. The minor must be older than the required minimum age listed in the bylaws, if any, to vote in FCU elections.