Board Adopts Rule for Credit Unions to Remove Officials
Titus, Nancy Raiden, THE JOURNAL RECORD
By Nancy Raiden Titus A rule clarifying the procedure for the state credit union administrator to remove credit union officers, directors and committee members was adopted Tuesday by the Oklahoma State Credit Union Board.
The board also heard discussion on a rule to change the method of assessing credit union fees and approved four membership expansion requests.
The board adopted Rule 25, which set out a procedure to be followed if the administrator deems the removal of an officer, director or committee member necessary for the health of the institution.
In such cases, the rule states that the administrator should provide a written order on the removal to the board of directors of the credit union. The board then has 10 days in which to remove the person, who can appeal the removal to the state credit union board.
If the credit union's board of directors does not remove the person after getting the written order, the administrator may suspend the person immediately. This provision triggers an automatic review by the state board.
``The idea behind this is that we needed something set down so that everyone understands how this will work,'' said Paul Foster, legal counsel for the Oklahoma State Banking Department, which oversees credit unions.
``Either we have the rule, or the administrator is just going to do it. It is better - for the industry and for the administrator - to have guidelines.''
The rule was discussed at the Feb. 26 meeting but was continued until Tuesday to give the industry more time for comment.
``We think we have satisfied most of the comments we have received about the rule,'' Foster said.
``There has not been a serious problem because of not having the rule,'' he said. But Wayne Osborn, credit union administrator, had said last month that there had been instances in which credit unions have refused to comply with similar requests from him.
Doug Eason, outside legal counsel for the Oklahoma Credit Union League, said the rule mirrors the powers given to the Oklahoma banking commissioner and the National Credit Union Administration.
The rule states that the removal order can apply to an individual determined to be ``reckless, unfit to participate in the conduct of the affairs of the credit union, or is practicing a willful and continuing disregard or violation of laws, rules, regulations or orders which are likely to cause substantial loss to the credit union or likely to seriously weaken the condition of the credit union.''
Discussion focused on whether the administrator should remove the person directly or whether he should direct the institution's board or supervisory committee to remove the person.
Foster said the rule originally provided for the board to be involved, then it was changed to a direct order from the administrator. …