1. (a) Elective office. No credit union shall adopt or amend its articles of incorporation or bylaws to designate or reserve one or more places on the board of directors for any member representative of any classification that restricts or infringes upon the equal rights of all members to vote for, or seek any position on, the board of directors of the credit union.

2. (b) Qualifications. No member may be elected to or serve on the board of directors if that member:

   1. (1) has been convicted of any criminal offense involving dishonesty or breach of trust;
   2. (2) is not eligible for coverage by the blanket bond required under the provisions of the Act, or §91.510 of this title (relating to Bond and Insurance Requirements);
   3. (3) has had a final judgment entered against him/her in a civil action upon the grounds of fraud, deceit, or misrepresentation;
   4. (4) has caused the credit union to suffer a financial loss;
   5. (5) has been removed from office by any regulatory or government agency as an officer, agent, employee, consultant or representative of any financial institution;
   6. (6) has been personally made subject to an operating directive for cause while serving as an officer, director, or senior executive management person of a financial institution; or has caused or participated in a prohibited activity or an unsafe or unsound condition at a financial institution which resulted in the suspension or revocation of the financial institution's certificate of incorporation, or authority or license to do business.
3. (c) Director application. Any member nominated for, or seeking election to, the board of directors shall submit a written application in such form as the commissioner may prescribe, together with any additional information the credit union may request. The application shall be submitted either to the nominating committee prior to the determination by the committee of its nominees; or to the board chair within 30 days following the election of a member who was not nominated by the nominating committee or who was appointed by the board to fill a vacancy. The applications of the elected/appointed directors shall be incorporated into and made part of the minutes of the first board meeting following the election/appointment of those directors. Applications of unsuccessful nominees shall be destroyed or returned to the nominee upon request.
4. (d) Director education. A credit union may, by written board policy, establish continuing education requirements for directors. The purpose of such policy should be to ensure that every director pursues a plan of education throughout his/her tenure on the board in order to remain current on the law and other issues affecting the credit union in the rapidly changing financial services industry. The policy should be appropriate to the size and financial condition of the credit union and the nature and scope of its operations.
5. (e) Disqualification of director. The failure of an elected/appointed director to complete and return the application or the failure to take the prescribed oath of office shall disqualify the director designate from holding office.

6. (f) Recall of director. The members of a credit union may remove a director by a vote of two-thirds of those members voting at any special or regular meeting of the members; provided, however, that:

   1. (1) the members voting shall constitute not less than 10% of the membership eligible to vote in the recall election;
   2. (2) all members are given at least 30 days notice of the meeting which shall state the reasons why the meeting has been called; and
   3. (3) the affected director is afforded an opportunity to be heard at such meeting prior to a vote on removal.
7. (g) Absences. The office of a director becomes vacant upon the convening of a regular board meeting, when a director fails to attend three (3) consecutive regular meetings without due cause, or when a director fails to attend six (6) regular meetings within any twelve-month period following the director's election or appointment. A new individual shall be appointed to fill any vacancies occurring in this manner within sixty days, unless extended by approval of the commissioner.

Source Note:The provisions of this §91.501 adopted to be effective May 11, 2000, 25 TexReg 3951; amended to be effective March 14, 2004, 29 TexReg 2636.