ARTICLE

Details of proposed rule and policy changes for AGM in January 2009

Further to the earlier posting of the vacancies and election details for the forthcoming Annual General Meeting to be held at Parkmore Hotel, Yarm Road, Eaglescliffe, Stockton on Tees on Wednesday 14 January 2009 from 7 pm, please find below details of rule and policy changes that are being proposed.

PROPOSED RULE CHANGES

 

Rule 18— Dormant accounts

(1) If after the date of registration of this rulebook a period of 12 months passes during which there have been no transactions on the account of a member (or on any of their accounts if they have more than one), the Board of Directors shall have discretion to declare that the account has become dormant. The Board may take account of any extenuating circumstances in making this determination.

(2) The Board of Directors shall have the discretion to levy an annual membership fee on each dormant account, of such sum as may be recommended from time to time by the Board of Directors and agreed by members at the AGM.

 

(3) In relation to a member who does not comply with the minimum shareholding requirement set out in Rule 22, and whose membership is dormant, the Board of Directors may declare the balance on their account, or accounts, to be forfeit to the credit union and their membership withdrawn in accordance with the provisions of Rule 22 (c);

(4) In relation to a member who does comply with the minimum shareholding requirement set out in Rule 22, but whose membership is dormant, the credit union may alert the member to the dormancy by following this procedure:

a. The credit union shall send a letter to the member’s last known address notifying the member that there have been no transactions on their account (or accounts if they have more than one) during the last 12 months, and providing the member with a three month period to determine their future use of their account or accounts;

b. The letter shall contain information on reactivating or closing the account and withdrawing from membership.

c. Reference shall be made to these Rules which permit the credit union to charge an annual membership fee;

d. The letter shall refer to Rule 18(5) which enables the credit union to remove dormant accounts into a suspense account and subsequently expel the member from membership.

(5) If the member does not reactivate or close their account or accounts within three months of receipt of the letter from the credit union, the Board of Directors has the discretion to:

a. Hold any monies within the account or accounts of such member in a suspense account pending the member’s subsequent withdrawal of their money, or activity on the account;

b. Charge the annual membership fee;

c. Expel the member from membership in accordance with Rule 14(h).

 

Proposed Amendment

 

Rule 18— Dormant accounts

(1) If after the date of registration of this rulebook a period of 12 months passes during which there have been no transactions on the account of a member (or on any of their accounts if they have more than one), the Board of Directors shall have discretion to declare that the account has become dormant. The Board may take account of any extenuating circumstances in making this determination.

(2) The Board of Directors shall have the discretion to levy an annual membership fee on each dormant account, of such sum as may be recommended from time to time by the Board of Directors and agreed by members at the AGM.

 

(3) In relation to a member who does not comply with the minimum shareholding requirement set out in Rule 22, and whose membership is dormant, the Board of Directors may declare the balance on their account, or accounts, to be forfeit to the credit union and their membership withdrawn in accordance with the provisions of Rule 22 (c);

(4) In relation to a member who does comply with the minimum shareholding requirement set out in Rule 22, but whose membership is dormant, the credit union may alert the member to the dormancy by following this procedure:

a. The credit union shall send a letter to the member’s last known address notifying the member that there have been no transactions on their account (or accounts if they have more than one) during the last 12 months, and providing the member with a six week period to determine their future use of their account or accounts;

b. The letter shall contain information on reactivating or closing the account and withdrawing from membership.

c. Reference shall be made to these Rules which permit the credit union to charge an annual membership fee;

d. The letter shall refer to Rule 18(5) which enables the credit union to remove dormant accounts into a suspense account and subsequently expel the member from membership.

(5) If the member does not reactivate or close their account or accounts within three months of receipt of the letter from the credit union, the Board of Directors has the discretion to:

a. Hold any monies within the account or accounts of such member in a suspense account pending the member’s subsequent withdrawal of their money, or activity on the account;

b. Charge the annual membership fee;

c. Expel the member from membership in accordance with Rule 14(h).

 

Comment: - Three months does appear to be a long period of time after the twelve month initial period. ABCUL have already altered their newest model rules reducing this to 6 weeks which seems a more sensible period of time.

 

 

Rule 20— Maximum shareholding

No member shall have, or claim an interest in shares of the credit union exceeding the greater of £5,000 (or such other amount as may be prescribed by law) and 1.5 per cent of the total shareholdings in the credit union. The maximum shareholding limit on a joint account shall be double the limit on an individual account. For the purpose of calculating an individual’s shareholding, the amounts held separately in an individual and joint account shall be amalgamated. For the purpose of these rules, the total shareholdings in the credit union shall be taken to be the total shareholdings as shown in the most recent audited balance sheet to have been sent with the credit union’s annual return pursuant to Rule 80.

 

Proposed Amendment

 

Rule 20— Maximum shareholding

No member shall have, or claim an interest in shares of the credit union exceeding £10,000 (or such other amount as may be prescribed by law) or 1.5 per cent of the total shareholdings in the credit union whichever is the greater figure. The maximum shareholding limit on a joint account shall be double the limit on an individual account. For the purpose of calculating an individual’s shareholding, the amounts held separately in an individual and joint account shall be amalgamated. For the purpose of these rules, the total shareholdings in the credit union shall be taken to be the total shareholdings as shown in the most recent audited balance sheet to have been sent with the credit union’s annual return pursuant to Rule 80.

 

Comment: - CRED was changed from £5,000 to £10,000 some time ago. Needs updating to reflect this!

 

…………………………………………………….oOo………………………………………………………..

 

Rule 25 - Junior deposits

The credit union may, if the directors so determine, take deposits up to a total of £5,000, or such higher maximum sum as may be prescribed by law, from a minor under the age of 16 years who upon the age of majority would be qualified to become a member of the credit union.

 

Proposed Amendment

 

Rule 25 - Junior deposits

The credit union may, if the directors so determine, take deposits up to a total of £10,000, or such higher maximum sum as may be prescribed by law or 1.5% of the total shareholding of the credit union, whichever is the greater, from a minor under the age of 16 years who upon the age of majority would be qualified to become a member of the credit union, subject to Rule 10 of these rules.

 

Comment: - CRED was changed from £5,000 to £10,000 some time ago. Needs updating to reflect this!

 

 

Rule 28— Loans to officers and employees of the credit union

A director, committee member or other officer or employee of the credit union may, as a member of the credit union, be granted a loan by the credit union subject to Rule 73. Such a member may not be involved in the decision on the loan and such a loan may not be approved solely by a loan officer. The Supervisory Committee shall be informed of the details of every such loan granted within 14 days of its approval.

 

Proposed Amendment

 

Rule 28— Loans to officers and employees of the credit union

(1)   A director, committee member or other officer or employee of the credit union may, as a member of the credit union, be granted a loan by the credit union subject to Rule 73. Such a member may not be involved in the decision on the loan and such a loan may not be approved solely by a loan officer. The Supervisory Committee shall be informed of the details of every such loan granted within 14 days of its approval.

(2)   The credit union must not make a loan to one of its officers or approved persons on terms more favourable than those available to other members of the credit union unless that person is a paid employee (other than a director) of the credit union.

(3)   A credit union must not make a loan to a relative of, or any person otherwise connected with, an officer, approved person or paid employee of the credit union on terms more favourable than those available to other members of the credit union.

 

Comment: - This is in line with current Inland Revenue rules and ABCUL’s newest rules have been changed to reflect this. We have agreed not to implement this but, if agreed; this can always be changed in the future if necessary.

…………………………………………………….oOo………………………………………………………..

 

Rule 51 — Number of Directors

The number of directors of the credit union shall be not less than 5 or more than such other number as may be agreed by members at the AGM. Directors (other than directors appointed under Rule 56) shall be elected at an annual general meeting by a show of hands or by a secret ballot, if so requested in accordance with Rule 46. The Board of Directors has the power to propose a policy on Election of Representatives to an AGM to ensure the Board consists of representatives of all areas, sections and diverse groups covered by the credit union.

 

Proposed Amendment

 

Rule 51 — Number of Directors

The number of directors of the credit union shall be not less than 5 or more than such other number as may be agreed by members at the AGM. Directors (other than directors appointed under Rule 56) shall be elected at an annual general meeting in accordance with Rule 46. The Board of Directors has the power to propose a policy on Election of Representatives to an AGM to ensure the Board consists of representatives of all areas, sections and diverse groups covered by the credit union.

 

Comment: - We have moved to postal ballots already. Unfortunately this was missed and members could resort to a show of hands if challenged. Needs to be updated to reflect this.

 

Governance Review – Directors – Elections and Representation

 

Current Policy

The current situation for the election of directors is first of all covered by Rule 48 – Nominations for Election and Rule 51 – Number of Directors. (See below)

Rule 48 - Nominations for election

All nominees for election shall be members of the credit union, of full age and from the particular credit union area where the vacancy occurs. Nominations for the Board of Directors, the Supervisory and Credit Committee (if appointed) shall be in writing, signed by a Proposer and Seconder, who shall be members of the credit union (from the particular credit union area where the vacancy occurs) and also by the nominee to indicate their consent..

 

Rule 51 — Number of Directors

The number of directors of the credit union shall be not less than 5 or more than such other number as may be agreed by members at the AGM. Directors (other than directors appointed under Rule 56) shall be elected at an annual general meeting by a show of hands or by a secret ballot, if so requested in accordance with Rule 46. The Board of Directors has the power to propose a policy on Election of Representatives to an AGM to ensure the Board consists of representatives of all areas, sections and diverse groups covered by the credit union.

 

The actual number of directors is approved at an AGM in accordance with Policy as shown below. This was last approved in 2004 at the inception of Police Credit Union.

 

1.2.12 Directors shall be elected by members from their original credit unions. These shall be as follows: -

 

Midlands (Mid West) 7 (Currently 4)

Merseyside 3 (Currently 3)

Northumbria 3 (Currently 2)

Cleveland 3 (Currently 1)

Hertfordshire 3 (Currently 2)

Avon & Somerset (Money-mate) 3 (Currently 2)

Devon & Cornwall 3 (Currently 2)

                                                                     -----

                                                                      25 (Currently 16)

                                                                     ===

 

 

Review

 

In light of the continuing Governance review a group of 7 Directors, the CEO and facilitator, Ian Maxwell, met at Guardians House on Wednesday 15^th October 2008 to discus matters and to come up with a formula for Director representation.

 

It became clear from early discussions that at least regional representation should be established. To this end it was decided that the country should be split up into 5 regions. It was decided that these should be the North West, North East, Midlands, South West & South East.

 

Recommendations

 

Many suggestions and formulas were discussed and the potential impact on the size and numbers of directors shown. After a number of hours it became obvious that whatever formula was used you may have ended up with around 19/20 directors. It was decided that any formula would not result in any saving to the organisation. It was decided that the following simple formula should be used.

 

Region	Offices	Forces & Potential Forces	Directors
North West	Liverpool	Merseyside, Cheshire, Greater Manchester, Lancashire & Cumbria	4
North East	Newcastle Stockton	Northumbria, Cleveland, Durham, North Yorkshire, West Yorkshire, South Yorkshire & Humberside	4
Midlands	Birmingham	West Midlands, West Mercia, Staffordshire, Warwickshire, Leicestershire, Derbyshire, Nottinghamshire, Lincolnshire & North Wales	4
South West	Bristol Exeter	Avon & Somerset, Devon & Cornwall, Gloucestershire, Hampshire, Dorset, Wiltshire, Dyfed Powys, Gwent & South Wales	4
South East	Welwyn Garden City	Hertfordshire, Northamptonshire, Kent, Surrey, Sussex, Essex, Suffolk, Norfolk, Cambridgeshire, Bedfordshire, Thames Valley City of London, Metropolitan & British Transport Police	4
		Total	20

 

The position of non-executive directors is withdrawn from January 2010. Forces shown are for information only at this stage and may be liable to change.

 

It was also felt that PCU should look at filling any skills gaps that may arise. In addition to the number of Directors PCU would seek to Co-Opt Directors (up to a maximum of 5) to fill any skills gaps that may be apparent, or indeed to use as enticement for large potential forces and those with their own credit unions.

 

These measures do not require a rule change. However, as per Rule 51, any change in policy has to be approved by the AGM. As this is not a rule change it would only require a simple majority and can be taken to the AGM in Stockton

 

We seek approval to take this matter to the AGM in January 2009.

 

 

Brian Longdon

Director - Compliance

17/11/2008