Both the NCUA and the Credit Union Times' Editor/Publisher PaulGentile are missing the point about credit union bylaw disputes.Who enforces the FCU bylaws, the courts or NCUA, is secondary tothe core question of why does NCUA empower a mere handful ofdisruptive dissidents to petition for a special membership meetingin the first place? If NCUA's standard bylaws allowed federalcredit unions to require a responsible 10% of members to petitionfor these special membership meetings like so many state statutesand bylaws do, then governance-threatening disputes requiringenforcement would become extremely rare.

Although a handful of states have special membership meetingpetition requirements worse than NCUA's 750-signature cap, the vastmajority requires many more members to call a special meeting. IfDFCU Financial were a Michigan-chartered credit union, over 16,000member signatures would have been required. If Maryland-chartered,Lafayette FCU would require over twice as many member signatures asthe FCU bylaws.

By far the most common state chartered credit union requirementis 10% of the entire membership. There are other states wherecredit union leaders can select their own requirements to includein the bylaws. The Illinois statutes, among others, don't evencontemplate members being able to call special meetings. A statelike California with a significant number of really large creditunions requires at least 3% of the entire membership. Even thatrelatively low 3% number assures that it would take over 20,000member signatures to disrupt California-chartered The Golden 1 CU'sgovernance structure.

NCUA may be looking at FCU bylaw enforcement as yet another wayto interfere in a credit union's business decision to convert itscharter to that of a mutual savings bank, but the application ofNCUA's decision will almost assuredly be to every type of bylawdispute. Who will be more fair and balanced–NCUA or the courts? IfNCUA intervenes in these high stakes disputes, won't it end up incourt anyway?

If Credit Union Times really wants to do a service for thecredit union industry, it will drop the bylaws enforcement issueand instead use its bully pulpit to encourage NCUA to replace the750-cap for membership meeting petitions with something moreresponsible. Such a move will reassure the industry andCongressional policymakers that this country's largest federallychartered credit unions are not so vulnerable to governancedisruption that credit unions' reputations are at risk and theshare insurance fund is unnecessarily exposed. Marvin C. UmholtzPresident/CEO Umholtz Strategic Planning & Consulting ServicesCastlerock, Colo. (Editor's Note: Mr. Umholtz is affiliated withthe Coalition for Credit Union Charter Options, a group thatadvocates for credit unions converting to mutual savingsbanks.)