ALEXANDRIA, Va. - A state court ruling last week that essentially enforces the bylaws of a credit union that unsuccessfully tried to convert to a bank won’t stop NCUA from reincorporating credit union bylaws into its regulations.
In fact, the still ongoing court case in which members of Dearborn, Mich.-based DFCU Financial are suing the credit union over its refusal to hold a special meeting for the purpose of removing the board in accordance with its own bylaws and to gain access to the CU’s books and records, only solidifies the federal regulator’s determination to bring bylaws enforcement back under its purview, according to NCUA’s John McKechnie.
“We would like to emphasize that our view all along was that the members’ petition and request should have been honored,” McKechnie told Credit Union Journal. “Furthermore, the length of time it took to have a state court make a decision underscored the need for NCUA to be able to work to protect the rights of members in cases like this, and this is one of the reasons we feel the reincorporation of the bylaws into NCUA regulations is necessary.”
Three DFCU members filed the lawsuit in the spring of 2006 after the now $1.8-billion CU announced it planned to convert to a mutual savings bank. Although DFCU cancelled the vote before it was complete, members of a group opposed to the conversion, DFCU Owners United, pressed on, asking the CU to release additional information on how the board had concluded there was a need to convert. That request was denied by the CU.
