Are you having a hard time keeping track of THAT board member? You know the one I’m talking about. Does he seemingly wander off into random parts of the world wearing a long sleeve, red and white striped shirt with a matching beanie? I’m very aware of this crisis. You have a recurring monthly meeting to conduct credit union business, and this guy is always AWOL or probably at the beach dressed like a candy cane…
Based on his lackadaisical approach to fashion, he’s likely close to retirement. Luckily, your federal credit union has a stellar attorney-reviewed succession plan for officials, and you won’t even notice that Waldo is missing.
Whether a board member leaves duty due to retirement, sickness, or removal based on membership vote (member-only), how does a federal credit union fill this vacancy and for how long? This FAQ (member-only) discusses how the federal credit union board should fill temporary board vacancies:
“Question –When a member of the board of directors retires, what is the proper way to temporarily fill that board vacancy until the annual meeting?
Answer –The Federal Credit Union Standard Bylaws require that a credit union appoint someone to fill any vacancy on the board of directors, as soon as possible, by vote of a majority of the directors then holding office. See, 12 C.F.R. Part 701, Appendix A, Article VI, Section 4. The standard bylaws also state that this appointed individual is only to serve until the next annual meeting at which point the members will vote to fill the remaining unexpired term to the board, if there is such a term.” (Emphasis added).
Another issue that may come up in this scenario is how many board members should be present to vote to fill a vacancy? This NCUA opinion letter provides the answer:
“You have asked this office for an interpretation of Article VII, Section 3 of the Federal Credit Union Bylaws which reads as follows:
Any vacancy on the board, credit committee, or supervisory committee shall be filled by a majority of the directors then holding office.
Your question is if there are nine board members must all be present at the board meeting when the vacancy is filled and must at least five of the nine vote for the winning candidate. There is no requirement that all board members be present. There is a requirement that a quorum be present for the board to transact business. (Article VII, Section 6). A quorum is defined as a majority of the total number of directors. (Article VII, Section 6). On a nine member board, a quorum would be five. (Article VII, Section 6). Once a quorum is present, at least five board members (“a majority of the directors then holding office”) must vote for the winning candidate.”
This is good news. In practice, if Waldo convinces 3 of your 9 board members to join him on the beach during a vote to replace him, the remaining responsible 5 members constitute a valid meeting to address credit union affairs.
If you have any questions on this subject, please contact the compliance team at compliance@americascreditunions.org.