Democracy Without Votes in Credit Unions

This is the season for annual meetings in credit unions and stockholder owned companies of all sizes.

Make Your Voice Heard

Because I inest In Vanguard  mutual funds I sometimes receive the above email subject line followed by this message;

Be the vote that counts

Dear Vanguard Investor, As an investor in these securities, you have the right to vote on important matters. This is your opportunity to make a direct impact on your investments. Your vote counts!

A Credit Union Example

For over three decades I have had a CD in a credit union of approximately $20,000.   It is paying  .25% interest.

The credit union recently sent all members this email announcing their annual meeting for member-owners:

Dear Member First Name,

We are conducting the 2025 Annual Meeting by Electronic Transmission as provided in Section 411 of the Amended and Restated Bylaws . . . effective April 28, 2017 (the “Bylaws”). The Annual Meeting will be hosted by video conference on April 25, 2025, at 5pm PT.

Registration is required to attend

We welcome you to join us and take this opportunity to submit questions in advance. To register, please send an email to X no later than 11:59pm PT on Monday, April 21, 2025. If you would like to submit a question, please do so in advance via email (to the same address above). We will answer as many questions as possible during the virtual meeting.

How to receive Annual Meeting materials

The Annual Meeting materials will be available for download at . . . on April 14, 2025. The materials will include the following:

Notice of Annual Meeting Meeting Agenda Minutes of 2024 Annual Meeting 2024 State of the Credit Union 2024 Annual Report

Matters requiring a vote

Please note that there is no new business to discuss. The only matter requiring a vote of the members in attendance is approval of the 2024 Annual Meeting minutes.

Credit Union 2025 list of candidates nominated

Board of Directors – Four (4) positions to be filled by acclamation of the Board of Directors as provided in the Bylaws:

Incumbant # 1 3-year term Incumbant # 2 3-year term Inxumbant #3 3-year term Incumbant #4 and CEO 3-year term

Section 501(D) of the Credit Union Bylaws provides “If no more nominations for vacant positions are received than the number of vacant positions, the credit union may, without further action, declare that those nominated and qualified to be elected are elected.” Four candidates have been nominated to fill the four open Director seats. Therefore, the Directors nominated will be approved by acclamation of the Board of Directors as provided by the Bylaws. As we move into 2025 with some economic volatility on the horizon, we remain focused on our mission to build our members’ financial health and wellbeing and to work diligently to ensure our members have the strong service and support they’re accustomed to. In 2024, we successfully rebuilt after a security incident, and we experienced what it was like to come together with strength and resilience to stay focused on our members. That focus is what drives us to provide ongoing value to members in the forms of fewer fees and better rates, plus all our financial wellbeing benefits and services – from personalized advice and a dedicated anti-fraud team to webinars and partner discounts. We continue to have the financial strength to make a difference for our members today and for the generations to come. Sincerely, CEO signature and the following personal note: Thank you for being a valued member since March 2007.

Upon sending in my interest in attending, I received this response:

Thank you for your interest in the 2025 Annual Meeting. We have received your request for registration and will be sending out a confirmation with the meeting access information prior to the meeting on April 25, 2025.

Democracy In Practice ?

The required annual meeting and election of board members is the single most important element of member-owner governance.   In many credit unions today converting the meeting into an administrative formality with no actual member involvement is par for the course.

Let’s be clear.  This is not democracy in any sense of the word.  Instead of seeking member participation and celebrating the cooperative model, it is an exercise in perpetuating power, or  the using current term oligarchy.

While I assume these volunteers are experienced and committed, they are missing the most critical element of leadership:  acknowledging their accountability to the member-owners.   That is the foundation of trust that undergirds every financial institution.

According to NCUA data, between 95% to 97% of all credit unions are rated camel codes 1 and 2.  This is not about financial oversight, but rather responding to the needs of members and communities with presence and engagement.

The future of credit unions may depend on members seeing their involvement as something more than a customer. To achieve that, they must be respected as owners.

Right now our votes do not count because there is no voting.  Credit unions lacking this member participation are missing their most important advantage versus all other options.