The credit union shall be directed by a board consisting of an odd number of directors, at least five in number, each of whom shall be a member of the credit union in his own right, to be elected by the members at their annual meeting.
Management and OperationsDirectors
Section § 14450
This law requires that a credit union must have a board of directors made up of an odd number of people, with at least five members. Each board member must be a member of the credit union themselves. These directors are elected by the credit union members during their annual meeting.
credit union board board of directors odd number of directors
Section § 14451
This law says that directors can be elected for terms up to three years. If directors are elected for more than one year, their terms should be staggered. This means that the number of directors' terms ending each year should be as equal as possible.
Directors may be elected for a term of three years or less. If directors are elected for terms in excess of one year their terms of office shall be staggered so that insofar as possible an equal number of such terms shall expire each year.
director elections term of office three-year term
Section § 14452
If a director misses three back-to-back board meetings without being excused, their position will be considered vacant.
The office of any director shall be declared vacant if such director is absent from three consecutive regular meetings of the board of directors unless excused therefrom.
director absence board meetings consecutive meetings
Section § 14452.5
This law explains how to fill an empty seat on a credit union's board of directors. If the vacancy is because someone finished their term, only credit union members can fill it. If directors temporarily fill a seat, it's only until the next annual meeting. After that, members vote on who should serve the rest of the term.
A vacancy on the board of directors shall be filled in accordance with Section 7224 of the Corporations Code, subject to the following:
(a)CA Financial Code § 14452.5(a) A vacancy that exists due to the expiration of the term of a director shall be filled only by the members of a credit union.
(b)CA Financial Code § 14452.5(b) If the board of directors elects a director to fill a vacancy, the director so elected shall hold office only until the next annual meeting at which time the members
shall elect a director to hold office until the expiration of the term for which elected.
(c)CA Financial Code § 14452.5(c) If the members elect a director to fill a vacancy, the director so elected shall hold office until the expiration of the term for which elected.
vacancy board of directors credit union members
Section § 14453
The board of directors of a credit union is responsible for overseeing its operations, finances, and records. They must hold regular meetings at least four times a year. The board can also create an executive committee, with at least three board members, to handle certain tasks as approved by the board.
The board of directors of every credit union shall have the general management of the affairs, funds, and records of the credit union. The board shall meet on a regular basis, not less than quarterly, as reasonably determined by the board. The board may appoint an executive committee of no fewer than three directors, to serve at its pleasure, to act as expressly approved by the board of directors in accordance with the laws and regulations.
credit union board of directors general management credit union affairs
Section § 14454
Within 10 days after the annual meeting of members, the directors must hold a meeting to elect the officers of the credit union. This process is guided by other sections that outline how these elections should be conducted.
The directors shall hold a meeting of all directors within 10 days after the annual meeting of members pursuant to Section 14804 for the purpose of electing the officers of the credit union as prescribed in Sections 14500 and 14501.
credit union officers annual meeting directors' meeting
Section § 14456
This section outlines the responsibilities of a credit union's board of directors, unless the bylaws specify otherwise. The directors review applications for new memberships and can delegate this task to certain committees or individuals, sometimes using automated systems with strict compliance checks.
They can also expel members for reasons like criminal convictions or abusive behavior, with some expulsion decisions being immediate for safety reasons. Expelled members have the right to appeal.
Directors are responsible for setting interest rates and declaring dividends, filling committee vacancies, and managing investments. They can amend bylaws, direct financial activities, and delegate certain powers to appropriate committees, which must report their actions monthly.
Unless the bylaws expressly reserve any or all of the following duties to the members, the directors have all of the following special duties:
(a)Copy CA Financial Code § 14456(a)
(1)Copy CA Financial Code § 14456(a)(1) To act upon all applications for membership. The directors may delegate the power to approve applications for new membership to either of the following, pursuant to a written membership plan adopted by the board of directors:
(A)CA Financial Code § 14456(a)(1)(A) The chairperson of a membership committee or an executive committee.
(B)CA Financial Code § 14456(a)(1)(B) An officer, director, committee member, or employee.
(2)CA Financial Code § 14456(a)(2) The directors or their delegates may utilize an automated system to
establish membership eligibility pursuant to a written membership plan adopted by the board of directors if all of the following conditions are met:
(A)CA Financial Code § 14456(a)(2)(A) The automated system is regularly tested for compliance with Section 14800, the credit union’s field of membership, and applicable laws and regulations.
(B)CA Financial Code § 14456(a)(2)(B) An application for new membership approved using an automated system is reviewed by the directors or their delegates within five business days to ensure compliance with subparagraph (A).
(C)CA Financial Code § 14456(a)(2)(C) The written membership plan includes a plan to address an approved application determined not to be in compliance with subparagraph (A).
(b)Copy CA Financial Code § 14456(b)
(1)Copy CA Financial Code § 14456(b)(1) To expel members for any of the following causes, subject to Section 14801:
(A)CA Financial Code § 14456(b)(1)(A) Conviction of a criminal offense involving moral turpitude.
(B)CA Financial Code § 14456(b)(1)(B) Failure to carry out contracts, agreements, or obligations with the credit union.
(C)CA Financial Code § 14456(b)(1)(C) Refusal to comply with the provisions of this division or of the bylaws.
(D)CA Financial Code § 14456(b)(1)(D) Abusive, threatening, or harassing behavior toward credit union staff, volunteers, or members, or the abuse of credit union systems or property.
(2)CA Financial Code § 14456(b)(2) The directors may delegate the power to expel members for cause to a membership committee or an executive committee, pursuant to a written membership plan adopted by the board of directors.
(3)Copy CA Financial Code § 14456(b)(3)
(A)Copy CA Financial Code § 14456(b)(3)(A) An expulsion pursuant to
subparagraph (D) of paragraph (1) may take effect immediately, without advance notice or an opportunity to be heard, if the board of directors, or its designee pursuant to subdivision (b), determines that immediate expulsion is reasonably necessary for the protection of the credit union or its staff, volunteers, or members.
(B)CA Financial Code § 14456(b)(3)(A)(B) A member expelled pursuant to subparagraph (A) shall be provided written notice within five business days after the effective date of that expulsion.
(C)CA Financial Code § 14456(b)(3)(A)(C) This paragraph shall not prohibit a member expelled pursuant to subparagraph (A) from appealing that expulsion pursuant to paragraph (4).
(D)CA Financial Code § 14456(b)(3)(A)(D) An expulsion pursuant to this paragraph shall be deemed to be fair and reasonable pursuant to Section 7341 of the Corporations Code.
(4)Copy CA Financial Code § 14456(b)(4)
(A)Copy CA Financial Code § 14456(b)(4)(A) A member who is expelled by the board of directors, or its designee, has the right to appeal therefrom to the board of directors, pursuant to reasonable procedures adopted by the board.
(B)CA Financial Code § 14456(b)(4)(A)(B) For purposes of this paragraph, “reasonable procedures” shall include, but not be limited to, all of the following:
(i)CA Financial Code § 14456(b)(4)(A)(B)(i) Written notice to the expelled member of the effective date of the expulsion.
(ii)CA Financial Code § 14456(b)(4)(A)(B)(ii) The right to appeal therefrom and the procedures for doing so.
(iii)CA Financial Code § 14456(b)(4)(A)(B)(iii) Written notice of the board’s final determination following an appeal.
(c)CA Financial Code § 14456(c) To determine from time to time the interest rate on obligations with members and to authorize the payment of interest
refunds to borrowing members. The board of directors may delegate this duty pursuant to subdivision (l).
(d)CA Financial Code § 14456(d) To fix the maximum number of shares that may be held by, and, in accordance with Section 15100, establish the maximum amount of obligations which may be entered into with, any one member.
(e)CA Financial Code § 14456(e) To declare dividends on shares in accordance with the credit union’s policies and to determine the interest rate or rates that will be paid on certificates for funds. The board of directors may delegate this duty pursuant to subdivision (l).
(f)CA Financial Code § 14456(f) To amend the bylaws, except where membership approval is required.
(g)CA Financial Code § 14456(g) To fill vacancies in the credit committee, and to temporarily fill vacancies caused by the suspension of any or all members of the credit
committee, pending a meeting of the members to determine whether to affirm the suspension and vacate the office, or to reinstate the member or members.
(h)CA Financial Code § 14456(h) To direct the deposit or investment of funds, except loans to members.
(i)CA Financial Code § 14456(i) To designate alternate members of the credit committee who shall serve in the absence or inability of the regular members to perform their duties.
(j)CA Financial Code § 14456(j) To perform or authorize any action not inconsistent with law or regulation and not specifically reserved by the bylaws for the members and to perform any other duties as the bylaws prescribe.
(k)CA Financial Code § 14456(k) For purposes of this section, “membership committee” means a committee of at least three persons appointed by the board of directors, provided that the number of members on the
committee is an odd number, each of whom shall be a member of the credit union. Notwithstanding any other law, a membership committee may be composed of directors, nondirectors, or both directors and nondirectors. No member of the supervisory committee or audit committee may serve on the membership committee.
(l)Copy CA Financial Code § 14456(l)
(1)Copy CA Financial Code § 14456(l)(1) The board of directors may, by resolution, delegate the following to an asset-liability management committee or similar committee, consistent with the policies of the board of directors:
(A)CA Financial Code § 14456(l)(1)(A) The duties set forth in subdivisions (c) and (e).
(B)CA Financial Code § 14456(l)(1)(B) The authority to determine the dividend rates on share accounts pursuant to subdivision (b) of Section 14901.
(2)CA Financial Code § 14456(l)(2) The asset liability management committee or similar committee
may be composed of directors, nondirector management officials, or both directors and nondirector management officials.
(3)CA Financial Code § 14456(l)(3) The asset liability management committee or similar committee shall provide a report to the board of directors, at least monthly, that specifies any actions taken.
credit union board duties membership approval automated membership system
