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CUs Need Two-Thirds Vote to Reduce Board Size

ALEXANDRIA, Va.-A super-majority is needed to change Federal Credit Union Bylaws, according to a March 17 NCUA legal opinion letter. The Board may change the number of directors by resolution but it must be by a two-thirds vote, NCUA Associate General Counsel Sheila Albin wrote. She also reminded that federal...

By Staff Writer | Updated on April 04, 2006

ALEXANDRIA, Va.-A super-majority is needed to change Federal Credit Union Bylaws, according to a March 17 NCUA legal opinion letter. The Board may change the number of directors by resolution but it must be by a two-thirds vote, NCUA Associate General Counsel Sheila Albin wrote. She also reminded that federal credit unions can only reduce board seats by the number of vacant seats. “Requiring the bylaw amendment process for changes to the number of directors prevents small minorities of a board from acting to manipulate or concentrate control,” Albin said. “For example, in an FCU with nine directors, six directors would have to approve any increase or decrease in the number of directors. Id. With a simple majority requirement, however, a quorum could be as few as five members, and three members (a majority of five) could then determine the size of the board.” Though New York State’s corporate law permits changes in the number of directors by majority vote, it does not apply here because the FCU Bylaws are not silent.

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