ALEXANDRIA, Va.-NCUA weighed in on a director dispute last week, ruling after the director was removed by a vote of the board that only membership can remove a director by a special vote.
The director can only be dismissed by a membership vote at a special meeting after the director is given a chance to be heard, NCUA ruled in a new legal opinion letter.
The name of the director is unknown because it was redacted in the legal opinion issued by NCUA.
The director, who was elected twice, was removed form the board at a special meeting of the board based on allegations of disruptive activities, breach of board confidentiality, divisive behavior and breach of fiduciary responsibility.
Federal CU bylaws only allow removal of a director if the director fails to attend regular meetings or otherwise fails to perform any of the duties as director, NCUA stated. "Voting in the minority, abstaining, or disagreeing with or opposing the views of other board members do not constitute a failure to perform the duties as a director."
If directors feel one of its members is acting inappropriately, they may bring the matter to the supervisory committee.
"It is the supervisory committee that has the authority to vote to suspend a director," according to NCUA.
The supervisory committee vote must be unanimous and will only serve to suspend the director until a special meeting of the members can be held to vote on the director's removal. The special meeting must be held no fewer than seven days and no more than 14 days after the director's suspension.
"Absent an affirmative vote at a special meeting, a director cannot be removed from membership on the board of director," said the legal ruling.
