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NCUA Takes Pains to Assure FCUs Against General Bylaw Policing; WesCorp/VolCorp Merger Stalls

Despite assurances from NCUA that they are not interested in becoming bylaw police, the credit union trade associations were not pleased with the NCUA Board's 2-1 decision to reincorporate the bylaws into regulation.

By Sarah Snell Cooke | Updated on October 30, 2007

ALEXANDRIA, Va. — Despite assurances from NCUA that they are not interested in becoming bylaw police, the credit union trade associations were not pleased with the NCUA Board’s 2-1 decision to reincorporate the bylaws into regulation.

“Staff in no way intends this to burden federal credit unions or get involved in bylaw disputes as a matter of course,” NCUA Staff Attorney Elizabeth Wirick explained in presenting the proposed final rule to NCUA. She emphasized that NCUA would only get involved “in those rare cases where fundamental, material member rights are at stake.” The reincorporation came about after members of two different credit unions, seeking to halt a mutual savings bank conversion process were denied relief in the state courts where NCUA legal opinion letters directed them to go. The agency has previously said in opinion letters that the bylaws are a contract between the members and the credit union that should be considered under state corporation law and adjudicated as such.

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