The Ability Of A State-Chartered Credit Union To Allow Voting Rights By Mail For The Election Of Directors - Q1 2000By the Division of Banks
Massachusetts General Law section 11 chapter 171 acknowledges the prohibition of proxy voting for credit unions. Although the Division agrees with the position that voting by mail does not constitute a proxy in the technical sense, it does go against the interpretation of the statute as evidenced by actual practice of the state-chartered credit union movement. The interpretation stands for the holding that in order to vote at the annual meeting of a credit union, or a co-operative bank, an individual must be present at the site and during the hours the meeting is open for voting.
The participatory and voluntary membership aspects of a credit union have resulted in the traditional regulatory and industry view that a member must be physically present to vote on matters at a annual meeting or at any special meeting. The prohibition on proxy voting supports the view that a member must attend in order to vote. The prohibition stands for the premise that if you cannot attend, you cannot have an agent vote for you. The Division's position and practice of state-chartered credit unions is consistent in that if you cannot attend or choose not to attend, you cannot have your vote counted. The Division has not knowingly and would not receive by-laws which allowed for voting by mail.
Based on the longstanding position and the conduct of state-chartered credit unions over these many years, the Division would not change the fundamental operation of a membership organizations meeting by a regulatory opinion. Moreover the general policy to read chapter 171 such that you must find a specific enabling grant of authority within the statute in order for a credit union to conduct an activity or a service remains.
For these reasons, the Division believes that seeking a change in the voting procedures at an annual meeting of a state-chartered credit union should occur by filing legislation to amend said chapter 171. The Division believes that any such change should be directly by statutory amendment and not through the parity with federal credit unions authority set out in section 6A of chapter 171 or the Division's regulations implementing that law, 209 CMR 50.00 et seq