Coming in 2023: Hybrid annual meetings

Greetings, Compliance folks! The joy of the holiday season is upon us – decorations adorn most buildings, holiday music is playing in stores, and kids (including my own) are eagerly awaiting their presents. This time of year also means that federal credit unions (FCUs) are also trying to plan for the upcoming calendar year, including planning their annual meetings. NCUA recently released a new letter to federal credit unions on the topic of planning annual meetings. Letter 22-FCU-03 has announced that starting January 1, 2023, federal credit unions (FCUs) can no longer hold annual meetings in an entirely virtual format. Instead, FCUs must move to a hybrid model that has an in-person attendance option. As explained below, this letter reverts the rules around annual meetings back to the pre-pandemic way of doing things.

Ghosts of Meetings Past

Let’s review how things were prior to March 2020 when the COVID-19 pandemic struck the nation. Before the pandemic, NCUA updated the FCU Model Bylaws through a 2019 Final Rule – the new bylaws would take effect on January 1, 2020. Commenters had asked NCUA to provide a fully virtual option for FCUs to hold their annual meetings, but NCUA stated (in the preamble to the final rule) that “[a]t this time, the Board does not favor completely virtual meetings.” The final rule discussed how fully virtual meetings could disenfranchise members who do not have access to electronic devices or who live in areas without broadband internet. Instead, NCUA permitted FCUs to host “hybrid” annual meetings – in which virtual attendance is allowed, but the FCU would also be required to offer an option for in-person attendance at a location within 100 miles of an office of the FCU. The FCU model bylaws also contained a “fill-in-the-blank” provision that allowed FCUs to choose the method through which members would cast their votes for the board of directors elections, with one of the options being to vote via electronic device. Voting via electronic device was particularly suited to hybrid meetings in which some of the members were attending remotely – however, the bylaws required the FCU to allow members to vote via mail-in ballot to avoid disenfranchising members who lacked access to an electronic device.


continue reading »