1. (a) Election of board of directors. The board of directors shall be elected by and from the membership in accordance with the Act, this section, the credit union's bylaws and election rules established by the board of directors of the credit union.
2. (b) Elective office. No credit union shall adopt or amend 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 restrict or infringe the equal rights of all members to vote for or seek any position on the board of directors of that credit union.

3. (c) 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 §91.506 of this title (relating to Director Meeting Fees and Bond Requirements); or
   3. (3) has caused the credit union to suffer a financial loss;
   4. (4) has been removed by any regulatory authority or government agency as an officer, agent, employee, consultant or representative of any credit union or other financial institution;
   5. (5) has had the certificate of incorporation or authority or license to do business of any state or federally chartered credit union or other financial institution of which the applicant was an officer, director or key management person suspended, revoked or applicant was personally made subject to an operating directive for cause.

4. (d) Application. Any member nominated for, or seeking election to, the board of directors must submit a written application in the form prescribed by the commissioner, together with any additional information requested by the credit union. The application shall be submitted:

   1. (1) to the nominating committee prior to the determination by the committee of its nominees; or

   2. (2) to the board chairman within 30 days following the election if the member elected is not nominated by the nominating committee or by petition, or is elected by the board to fill an unexpired term. The applications of elected directors shall be incorporated into and made a part of the minutes of the first board of directors meeting following the election of those directors. Applications of unsuccessful nominees shall be destroyed or returned to the nominee upon request. The application must be on the standard form promulgated by the commissioner and shall establish at a minimum that the nominee or director designate:

      1. (A) has not been convicted of a criminal offense involving dishonesty or breach of trust or has not been convicted of any felony;
      2. (B) is eligible for coverage under the blanket bond required by this Act, §5.06, and any rules adopted under this Act;
      3. (C) has not defaulted in the payment of a voluntary obligation to the credit union or has otherwise caused the credit union to incur a financial loss;
      4. (D) has not been removed by any regulatory authority or government agency as an officer, agent, employee, consultant or representative of any credit union or other financial institution;
      5. (E) has not had the certificate of incorporation or authority or license to do business of any state or federally chartered credit union or other financial institution of which the applicant was an officer, director or key management person suspended, revoked or applicant was personally made subject to an operating directive for cause. Failure to complete and return the application or failure to take the prescribed oath of office shall disqualify the nominee or director designate from holding office.
5. (e) Removal of directors. In addition to removal of directors by the board of directors as provided in the bylaws, the members may remove a director by a vote of two-thirds of those members voting at any special or regular meeting; provided however, that the members voting shall constitute not less than 10% of the membership eligible to vote in any election, and provided that all members are given at least 30 days' notice of the meeting which shall state the reasons why the meeting has been called.

Source Note:The provisions of this §91.503 adopted to be effective March 8, 1984, 9 TexReg 1152; amended to be effective December 31, 1990, 15 TexReg 7367; amended to be effective July 8, 1994, 19 TexReg 4930.