Credit Union Election Success

If there’s one word to describe the state of credit union elections, it’s change.

Credit unions are closing and merging in record numbers, even though membership numbers are climbing.

Evolving boards, modifications of bylaws, mergers, charter conversions, and more can be a long and complex journey.

For over 30 years, Survey & Ballot Systems (SBS) has partnered with credit unions to create highly successful elections. We work with credit unions across the country, and many report that the voting landscape has changed rapidly. It can be difficult to keep up, even in quieter times. Taking stock regularly using credit union surveys is an excellent way to gather insights regarding member opinions and overall experiences in a constantly evolving landscape. 

Still, with growing credit union membership and an unprecedented number of mergers and bylaw changes happening even at the National Credit Union Administration (NCUA), the pace of change is as fast as lightning.

SBS is here to guide you along the roadmap to success in your credit/financial union election.

What Are You Voting For?

When we think of credit union voting, the election for the board of directors is the one that most often comes to mind. However, votes within the credit union industry have become more frequent and are held for diverse reasons, such as mergers, charter changes/conversions, the addition of board members, bylaw changes, and more.

Each type of credit union election has its own objectives and requirements for success. So, what are your members voting for? 

1. Mergers

Credit union mergers are incredibly complex, require a high level of scrutiny, and, most importantly, must receive membership approval.

The Code of Federal Regulations provides a clearly defined credit union merger checklist. Mergers must follow this overall timeline:

• Preparation of a merger plan
• Submission of the merger proposal to the NCUA
• Approval of the merger proposal by the NCUA
• Approval of the merger proposal by members
• Certification of the vote on the merger proposal
• Completion of the merger

Each step includes specific requirements, documents, provisions, and actions that require precision and transparency for regulatory and member approval. In other words, a merger is not the time to skimp on election preparations and implementation.

Members have the right to vote on a merger proposal in person and/or by mail or electronic ballot. They must be given advance notice of in-person meetings, which must include the meeting details, a summary of the merger plan (including financial statements), reasons for the proposed merger, any information regarding a new credit union identity/brand, and a copy of the merger proposal ballot. This list of requirements applies only to the meeting notice!

In some cases, a simple majority approval can provide the green light for credit union mergers, but in others, an independent entity must collect and tally votes and certify the results. In other instances, a certain percentage of the total membership must participate in voting for the merger to be approved.

The required quorums for mergers can be significantly higher than the average response rate needed for a credit union election. In addition to all the other stipulations, you may need to enhance your communication strategies to get members to cast their ballots.

Formulating a sound plan to communicate the merger process and promote member voting is crucial, as your credit union will not want to risk seeing the merger fail due to an unreached quorum. Transparency throughout each step of the process is written into NCUA’s current merger guidelines.

The key to a successful merger is keeping member voters informed throughout the process about how it benefits the organization, so they have a complete picture of what is happening and why.

2. Charter Changes / Conversions

A credit union is either state-chartered or federally chartered. Federally chartered credit unions fall under the regulatory authority of NCUA, while state-chartered credit unions are regulated by the state in which they are chartered.

While there are many reasons a credit union might consider a charter conversion, the most common are:

• To increase their field of membership.
• To gain access to more favorable operating fees.
• To realize the opportunity for more agreeable oversight and regulation.

One of the most pressing questions facing many credit union boards is whether their current charter is working for the organization or if it would benefit from a change or conversion.

Some considerations for boards and credit union management when evaluating the merits of a charter change/conversion include:

• Potential benefits or downfalls to being governed nationally vs. locally.
• The ability to grow or expand under the current charter.
• How a charter change may affect current services, technology, and product offerings.
• Understanding and evaluating all the required legal and regulatory steps.
• Member attitudes toward a potential change.
• Growth potential compared against costs to make the change/conversion. 

Communication is key to any item or event requiring member input and a vote. Letters, phone calls, social media ads, promoted posts, website banners, splash pages, newsletters, articles, voter guides, and more are all effective tools for informing members and motivating them to participate.

3. Board Elections / Bylaw Changes

Board and leadership development and organizational guidance are at the core of most credit union elections.

Board elections and bylaw changes offer the opportunity to engage members, identify emerging and future credit union leaders, and hold the organization accountable to its members.

When credit unions can show members that reliable, secure, transparent, and competitive elections are a priority, the payoff is higher voter participation, member confidence, and a sterling public image. 

A credit union’s bylaws formally establish the organization’s name and purpose, define the qualifications for membership, establish the shares of members, formalize the guidelines for member meetings and election procedures, organize the framework for the board of directors and related committees, and more.

All federal credit unions must follow the guidelines and regulations set out by NCUA to effect bylaw changes. These bylaw changes require a member vote, review, and approval by NCUA.

Knowing your credit union’s existing bylaws is vital, as they will likely impact the approval process for new proposed bylaws.

Many credit union members don’t recognize the importance of bylaws and the importance of participating in an election to enact bylaw amendments, so it’s crucial that organizations effectively communicate these points to members.

Credit Union Election Marketing

Credit union elections can only be effective if members are aware of them and feel motivated to participate. Since many changes require a quorum for changes to be enacted, election marking tactics must be on point to ensure the success of a credit union’s election. 

A credit union member effort survey is a good starting point. This valuable tool provides insights into member dynamics and preferred communication methods that may need to be addressed and updated to garner greater engagement in the election process. 

In addition, SBS has identified three effective marketing tactics that boost election awareness to set your credit union up for the best chance of election success. These are:

1. Onsite marketing tactics
2. Print-based marketing tactics
3. Digital marketing tactics

You should use these strategies in unison to encourage nominations and bolster participation. 

Partner With SBS for a Successful Credit Union Election

Facilitating a credit union election can be challenging if you aren’t sure of the process. You’ll need to take multiple steps in a specific order to ensure complete legality and transparency. The professional team at SBS offers turnkey election and survey services, so no matter what type of support you need, we can help. Utilizing a skilled third-party election service provider enhances confidence in the system and allows leadership to focus on other issues. 

To find out more about our services and how we can support your credit union, contact us today!