| (a) Board Representation. The credit union's bylaws
shall govern board selection and election procedures. No credit union
shall adopt or amend its articles of incorporation or bylaws to designate
or reserve one or more places on the board of directors for any classification
that results in a restriction or infringement upon the equal rights
of all members to vote for, or seek any position on, the board of
directors of the credit union. In addition, each credit union shall
adopt policies and procedures that are designed to assure that the
elections of directors are conducted in an impartial manner.
(b) Qualifications. A member may not serve as director
of a credit union if that member:
(1) has been convicted of any criminal offense involving
dishonesty or breach of trust;
(2) is not eligible for coverage by the blanket bond
required under the provisions of the Act, or §91.510 of this
title (relating to Bond and Insurance Requirements);
(3) has had a final judgment entered against him/her
in a civil action upon the grounds of fraud, deceit, or misrepresentation;
(4) has a payment on a voluntary obligation to the
credit union that is more than 90 days delinquent or has otherwise
caused the credit union to suffer a financial loss;
(5) has been removed from office by any regulatory
or government agency as an officer, agent, employee, consultant or
representative of any financial institution;
(6) has been personally made subject to an operating
directive for cause while serving as an officer, director, or senior
executive management person of a financial institution; or has caused
or participated in a prohibited activity or an unsafe or unsound condition
at a financial institution which resulted in the suspension or revocation
of the financial institution's certificate of incorporation, or authority
or license to do business;
(7) has failed to complete and return a director application
in accordance with subsection (c) of this section; or
(8) refuses to take and subscribe to the prescribed
oath or affirmation of office.
(c) Director application. Any member nominated for,
or seeking election to, the board of directors shall submit a written
application in such form as the credit union may prescribe. The application
shall be submitted either to the nominating committee prior to its
selection of nominees; or to the board chair within 30 days following
the election of a member who was not nominated by the nominating committee
or who was appointed by the board to fill a vacancy. The applications
of the elected/appointed directors shall be incorporated into and
made part of the minutes of the first board meeting following the
election/appointment of those directors. Applications of unsuccessful
candidates shall be destroyed or returned upon request. The commissioner
may review and require that changes be made to any application form,
which is deemed inadequate or unfairly discriminates against certain
classes of members.
(d) Director continuing education. Directors must develop
and maintain a fundamental, ongoing knowledge of the regulations and
issues affecting credit union operations to assure a safe and sound
institution. A credit union shall, by written board policy, establish
appropriate continuing education requirements and provide sufficient
resources for directors to achieve and maintain professional competence.
The policy shall include a provision requiring the credit union to
prepare, on an annual basis, a continuing education plan for its Directors
that is appropriate to the size and financial condition of the credit
union and the nature and scope of its operations.
(e) Prohibited conduct. A director shall not:
(1) Divulge or make use of, except in the performance
of office duties, any fact, information, or document not generally
available to the membership that is acquired by virtue of serving
on the board of the credit union.
(2) Use the director's position to obtain or attempt
to obtain special advantage or favoritism for the director, any relative
of the director, or any person residing in the director's household.
(3) Accept, directly or indirectly, any gift, fee,
or other present that is offered or could be reasonably be viewed
as being offered to influence official action or to obtain information
that the director has access to by reason of serving on the board
of the credit union.
(f) Recall of director(s).
(1) Petition. Under procedures set out in the credit
union's bylaws, members may request a special membership meeting to
consider removing the entire board or individual directors for cause
relating to serious mismanagement or a breach of fiduciary duties.
The board shall conduct any resulting special meeting as prescribed
in the credit union's bylaws.
(2) Membership Vote. The members of a credit union
may remove a director by a vote of two-thirds of those members voting
at the special meeting; provided, however, that:
(A) a separate vote is conducted for each director
sought to be recalled;
(B) the members voting shall constitute not less than
10% of the membership eligible to vote in the recall election;
(C) all members are given at least 30 days notice of
the meeting which shall state the reasons why the meeting has been
called; and
(D) the affected director(s) is afforded an opportunity
to be heard at such meeting prior to a vote on removal.
(3) Vacancy on the Board. If a vacancy occurs as a
result of a recall, the vacancy shall be filled by the affirmative
vote of a majority of the remaining directors. If the entire board
is removed as a result of the recall, the members shall fill the vacancies
at the recall meeting. Directors elected to fill a recall vacancy
shall hold office only until the next annual meeting when any unexpired
terms shall be filled by vote of the members.
(g) Absences. Any director who fails to attend three
(3) consecutive regularly scheduled meetings without an excuse approved
by a majority vote of the board, or who fails to attend six (6) regularly
scheduled meetings during any twelve-month period following the director's
election or appointment is automatically removed from office. A new
person shall be appointed to fill any vacancies resulting from poor
attendance within sixty days of the date of the meeting that led to
the automatic removal. The commissioner in the exercise of discretion
may extend the deadline for filling the vacancy.
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| Source Note: The provisions of this §91.501 adopted to be effective May 11, 2000, 25 TexReg 3951; amended to be effective March 14, 2004, 29 TexReg 2636; amended to be effective July 8, 2007, 32 TexReg 3978; amended to be effective July 10, 2011, 36 TexReg 4110; amended to be effective July 13, 2014, 39 TexReg 5147 |
