BYLAWS
NATIONAL RURAL UTILITIES COOPERATIVE
FINANCE CORPORATION
(As amended March 25, 1970; February 29, 1972; February 27, 1973;
February 1, 1983; February 3, 1987; February 9, 1988; February 11,
1992; February 28, 1995; March 21, 2000; February 17, 2004; and
March 1, 2005)
ARTICLE I - Purposes and Powers
Section l. Purposes
.
The purposes of National Rural Utilities Cooperative Finance
Corporation (hereinafter called the Association) shall be as stated
in its Articles of Incorporation.
Section 2. Powers .
(a) For the
accomplishment of its purposes, the powers of this Association
shall be those conferred upon it by the District of Columbia
Cooperative Association Act (hereinafter referred to as the
Act).
(b) The
Association shall engage only in those activities directly related
to carrying out its purposes as stated in its Articles of
Incorporation, and shall at no time furnish services, other than
financing services, provided to, or engage in activities, other
than financing activities, conducted for its Class A, Class B, and
Class C members by a Class D member.
ARTICLE II-Members and Membership;
Associates
Section 1 Eligibility for
Membership .
The original subscribers to membership shall constitute the
initial membership of the Association, and they are designated
charter members without payment of membership fee.Charter
memberships shall terminate when members have been admitted to
membership from all eleven districts established in Article IV,
Section 3 of these Bylaws. Other than the charter members,
membership in the Association shall be limited to the following
classes:
Class A .
Cooperative or nonprofit corporations, public corporations,
utility districts, and other public bodies, which have received or
are eligible to receive a loan or commitment for a loan from the
Rural Utilities Service or any successor agency, and which are
engaged or planning to engage in the furnishing of utility services
to their members and patrons for their use as ultimate
consumers.
Class B .
Cooperative or nonprofit corporations which are federations of
Class A members or of other Class B members, or both, or which are
owned and controlled by Class A members or by other Class B
members, or both, and which are engaged or planning to engage in
the furnishing of utility services primarily to Class A members or
other Class B members.
Class C .
Statewide and regional associations which are wholly-owned or
controlled by Class A members or Class B members, or both, or which
are wholly-owned subsidiaries of a CFC member, and which do not
furnish utility services but which supply other forms of service to
their members.
Class D .
National associations of cooperatives which are Class A, Class
B, and Class C members, provided said national associations have,
at the time of admission to membership in this Association, members
domiciled in at least 80 percent of the states of the United
States.
Section 2. Eligibility for Association
.
An Associate relationship with the Association shall be limited
to nonprofit groups or entities organized on a cooperative basis,
which are owned, controlled, or operated by Class A, B, C or D
members of the Association, and which are engaged in or plan to
engage in the furnishing of non-electric services, including
without limitation telecommunication services, primarily for the
benefit of ultimate consumers. No Associate shall be entitled
to vote at any meeting of the members, whether district or annual,
or to be counted for purposes of determining whether the requisite
number of members is present to constitute a quorum at any meeting
or has requested the call of a special meeting. Trustees,
directors, and managers of Associates shall not by virtue of any of
these offices be eligible for election to the Board of
Directors.
Section 3. Method and Terms of Admission to Membership
or Association .
(a) An
applicant for membership or association shall make application
therefor on a form which shall be specified by the Board of
Directors, and shall forward said application to the Secretary
accompanied by payment of a fee which shall be $1,000.00 for
organizations classified as Class A, Class B, and Class D in
Article II, Section 1, and Associates in Article II, Section 2, and
$200.00 for organizations classified as Class C in Article II,
Section 1 of these Bylaws.
(b) The
Secretary shall present each application with the required
accompanying documents and payment of membership fee to the Board
of Directors for approval; and upon determination that the
applicant has fully complied with the eligibility and other
requirements of these Bylaws, the applicant may be admitted to
membership. A certificate of membership, in form as specified
by the Board of Directors and complying with the requirements of
the Act, shall be issued to the applicant upon admission to
membership and, subject to Article II, Section 7, the applicant
shall have all the rights, privileges, duties, and responsibilities
of membership from and after the date of such issuance.
Section 4. Property Rights of
Members; Non-Liability for Debts of the Association .
The property rights of all members shall be equal; they shall be
entitled to the return of the par value of their membership
certificates when and as provided by law, and in the Articles of
Incorporation and these Bylaws. The property of the members
of the Association shall be exempt from execution for the debts of
the Association and no member shall be liable or responsible for
any debts or liabilities of the Association.
Section 5. Transfer of
Membership-Withdrawal .
(a) Membership in the Association and
certificates representing such membership shall not be
transferable, except that, in case of a merger or consolidation of
a member with another corporation, membership may be vested in the
successor corporation, provided the latter is eligible for
membership.
(b) Withdrawal from membership and
retirement of membership certificates may be accomplished in the
manner prescribed in the Act. For the purpose of sections of
the Act referring to the par value of a member’s holdings,
the par value of membership certificates which constitute such
holdings shall be the amount of the membership fee prescribed for
the applicable class of membership in Article II, Section 3,
Subsection (a) of these Bylaws.
Section 6. Effect of Termination
of Membership .
Termination of membership in any manner shall operate as a
release of all right, title, and interest of the member in the
property and assets of the Association; provided, however, that
such termination of membership shall not release the member from
debts or liabilities of such member to the Association.
Section 7. Member Suspension .
(a) The Board of Directors of the
Association may suspend members as provided in this Bylaw, and as
permitted by law. The Board of Directors may suspend a member upon
an affirmative vote of two-thirds of the Board of Directors present
and voting, for one or more of the following reasons
(“Suspension Reasons”): (i) if required by applicable
law; (ii) for failure by the member to timely pay any amounts due
to the Association, which failure shall continue beyond any
applicable grace period; (iii) failure by the member to comply with
the Articles of Incorporation and the Bylaws of the Association;
(iv) if the member legally dissolves or otherwise ceases to exist
(except to the extent that such dissolution is covered by the terms
of Section 5(a) of this Article II); or (v) if the member
voluntarily requests that its membership be suspended.
(b) Other than in the case of a
voluntary membership suspension, the Association shall provide
written notice, including the underlying Suspension Reason, to any
member being considered for suspension, not less than thirty (30)
days prior to the date when the Board of Directors shall vote on
the proposed suspension. Such member shall have the opportunity to
comment on the proposed suspension within fifteen (15) days of the
date of such notice. The notice will inform the member of its right
to comment on the proposed suspension.
(c) A suspended member forfeits
and relinquishes all rights provided in the Articles of
Incorporation and the Bylaws of the Association, including, but not
limited to, any voting rights, or privileges, provided, however,
that such suspension of membership rights shall not release the
member from debts or liabilities of such member to the Association
or in any other way affect the debts and liabilities of such member
to the Association and will not entitle the suspended member to the
payment of any fees or other amounts due from the Association other
than when due and payable in the ordinary course.
(d) The Board of Directors may
lift the suspension of a member upon an affirmative vote of
two-thirds of the Board of Directors present and voting.
ARTICLE III-Meetings of
Members
Section 1. Annual Meeting
.
The annual meeting of the members shall be held within the first
six months of each calendar year at such time and place as shall be
designated by the Board of Directors in the notice of the meeting,
for the purpose stated in the notice and for transacting such other
business as may come before the meeting. In the event that the
national welfare or the best interest or convenience of the
Association shall, in the judgment of the Board of Directors,
demand a postponement or advancement of the annual meeting, such
annual meeting may be postponed for a period not exceeding 180
days, or advanced not more than 90 days, by the Board of Directors,
and all members shall be notified of the postponement or
advancement, and the date fixed for the postponed or advanced
annual meeting, and such annual meeting when so held in accordance
with such notice shall be and constitute the regular annual meeting
of members in as full, complete, and ample a manner as though held
on the date originally fixed for the meeting. Failure to hold
the annual meeting at the designated time shall not work a
forfeiture or dissolution of the Association.
Section 2. Special Meetings
.
Special meetings of the members may be called by the President,
by the Board of Directors, or upon a written request signed by at
least ten per cent (10%) of all the members and it shall thereupon
be the duty of the Secretary to cause notice of such meeting to be
given as hereinafter provided. Special meetings of the
members may be held at any place specified in the notice of the
special meeting.
Section 3. Notice of
Members’ Meetings .
Written or printed notice stating the place, day, and hour of
the meeting and the purpose or purposes for which the meeting is
called, shall be delivered not less than forty-five (45) days nor
more than sixty (60) days before the date of the meeting, either
personally, by mail, or by any alternative method permitted by
applicable law, by or at the direction of the Secretary, or by the
persons calling the meeting, to each member. If mailed, such
notice shall be deemed to be delivered when deposited in the United
States mail, in a sealed envelope, addressed to the member at the
member’s address as it appears on the records of the
Association, with postage thereon prepaid. The failure of any
member to receive notice of an annual or special meeting of the
members shall not invalidate any action which may be taken by the
members at any such meeting.
Section 4. Quorum
.
Except as otherwise provided in Article IV, Section 5, the
presence of representatives of at least ten percent (10%) of the
total number of members of the Association shall constitute a
quorum for the transaction of business at all meetings of the
members. In the event that less than a quorum as herein provided
shall be present at any regular or special meeting, a majority of
those present may adjourn the meeting from time to time without
further notice.
Section 5. Voting
.
Each member shall be entitled to one vote and no more upon each
matter submitted to a vote at all meetings of the members. In
the event the representative of a member is absent, or is unable or
refuses to act, an alternate designated by such member shall act as
the representative of the member and shall cast the vote of such
member. However, if both the representative and alternate of
such member shall fail to act, then the President of such member
may represent and cast the vote of such member as provided in
Article III, Section 6 of these Bylaws. No individual may
represent more than one member and proxy voting is prohibited in
all meetings.
Section 6. Member
Representatives and Alternates .
Each member admitted to membership pursuant to Article II,
Section 3 of these Bylaws shall be entitled to select either by
vote of its membership or its Board of Directors one of its
members, directors, or employees to act as the representative, and
one such person to act as the alternate, of such member at the
meetings of the Association. Such representative or alternate
when so selected shall continue to be the representative or
alternate, respectively, of such member until the representative or
alternate shall resign or the member shall have selected a
successor representative or alternate and shall have so notified
the Secretary of the Association in writing.
In the event any member shall fail to select a representative or
alternate as herein provided or the representative or alternate
selected by such member shall be unable to serve or for any cause
fail to so serve, the President of the member shall serve as its
representative and cast its vote. To participate in any meeting of
the Association, a member’s representative or alternate shall
first be certified to the Association in a manner determined by the
Board of Directors of the Association.
Section 7. Order of Business
.
The order of business at the annual meeting of the members, and
so far as applicable and possible at all other meetings of the
members, shall be essentially as follows:
1. Enrollment and determination of a
quorum.
2. Reading of the notice of the meeting
and proof of the mailing thereof, or of the waiver or waivers of
notice of the meeting, as the case may be.
3. Reading of unapproved minutes of
previous meetings of the members and the taking of necessary action
thereon.
4. Presentation
and consideration of reports of officers, directors, and
committees.
5. Unfinished business.
6. New business.
7. Adjournment.
Section 8. Conduct at Member
Meetings .
In addition to the application of Robert’s Rules of Order
provided for in Article XIII, Section 4, the presiding
officer at any member meeting:
(a) May
remove, or provide for the removal of any person or persons from
any member meeting for unruly, disruptive, or similar behavior;
and
(b) May use
reasonable discretion necessary to conduct the member meeting in an
efficient and effective manner.
ARTICLE IV-Directors
Section 1. Number and General
Powers .
The business and affairs of the Association shall be managed by
a Board of up to twenty-three Directors, which shall exercise all
of the powers of the Association except such as are by law, the
Articles of Incorporation, or these Bylaws conferred upon or
reserved to the members.
Section 2. First Board of
Directors .
(a) The
persons named in the Articles of Incorporation of the Association
as members of the First Board of Directors shall compose the board
until they are succeeded by a board elected by members of the
Association other than its charter members, or until their
successors shall have been otherwise elected and shall have
qualified.
(b) In the
event that applicants for Class A, Class B, Class C, and Class D
membership shall not have been admitted into membership in the
Association by July 1, 1970, in lieu of the nominating and election
procedures prescribed in this Article, the First Board of Directors
shall make such provision as the board shall deem appropriate for
the nomination and election of the first elected Board of Directors
and the selection of nominating committees in each district, to be
conducted at the first regular annual meeting of members, or at a
special meeting of members duly called for such purposes, after
members, other than charter members, shall have been admitted to
membership in all eleven districts. Thereafter, the
procedures prescribed in this Article for the nomination and
election of directors shall be followed.
Section 3. Districts
.
(a) There
shall be eleven districts as follows:
No.
1: Maine, Vermont, New Hampshire,
Massachusetts, New York,
Connecticut,
Rhode Island, New Jersey, Pennsylvania, Delaware,
Maryland,
Virginia, and North Carolina.
No.
2: South Carolina, Georgia, Florida,
and all territories, possessions, and
commonwealths
of the United States bordering upon or in the Atlantic Ocean.
No.
3: Kentucky, Tennessee, Mississippi,
and Alabama.
No.
4: Michigan, Indiana, Ohio, and West
Virginia.
No.
5: Wisconsin, Iowa, and Illinois.
No.
6: North Dakota, South Dakota, and
Minnesota.
No.
7: Wyoming, Nebraska, Colorado, and
Kansas.
No.
8: Oklahoma, Missouri, Arkansas, and
Louisiana.
No.
9: Washington, Montana, Idaho, Oregon,
Nevada, California,
Utah,
Alaska, Hawaii, and all territories, possessions, and
commonwealths
of the United States bordering upon or in the
Pacific
Ocean.
No.
10: Arizona, New Mexico, and
Texas.
No.
11: Class D Member
(b) Each district shall be represented
by two board members.
(c) In
Districts Nos. 1 to 10, inclusive, one of the two positions on the
Board of Directors in each district shall be designated
“Position D” and the other “Position
M.” No person shall be eligible to become or remain a
“Position D” director who is not a trustee or director
of a member organization within the district; and no person shall
be eligible to become or remain a “Position M” director
who is not a manager of a member organization within the
district. A person who is both a manager and a trustee or
director of member organizations shall not be eligible to become or
remain a “Position D” director.
(d) At all
stages of the nominating and election process prescribed in this
Article IV, there shall be clearly stated in all notices and
petitions and on all ballots the designation of the position to
which a candidate is to be elected.
(e) The two
directors in each of Districts Nos. 1 to 10, inclusive, shall not
represent members from the same state, except where only one state
within the district has members.
(f) Other
than the Class D member, in the event a member conducts operations
in more than one state or district, it shall be deemed to be a
member within the state or district in which its principal
headquarters is located: except that upon the request of such a
member, the Board of Directors may designate that for purposes of
this section the member is located in a state or district in which
it conducts operations, other than the state or district in which
its principal headquarters is located.
Section 4. At-Large Director Position.
(a) In addition to the twenty-two
(22) directors elected from the districts described in Article IV,
Section 3 above, if the Board of Directors in its discretion so
determines, then there may be one additional director (the
"At-Large Director") elected to serve on the Board of Directors of
the Association from time to time.
(b) The At-Large Director shall be
an at-large director elected by the members in the manner set forth
in Article IV, Section 6(c) below.
(c) The At-Large Director shall
serve on the Audit Committee described in Article V.
Section 5. District Meetings
.
The Board of Directors each year shall call a separate meeting
of the members in each of Districts Nos. 1 to 10, inclusive, as
established by Section 3 of this Article, for the purpose of
electing a nominating committee, or electing directors or both, as
the case may be. Such district meeting shall be held during
the period July 1 to December 31 of each calendar year at such
place within or without said district as shall be designated by the
Board of Directors. Notice of such meeting shall be given in
accordance with the provisions of Article III, Section 3 and shall
specify the persons to act as chairman and secretary of the meeting
and the business to come before the meeting, including the names of
any director candidates to be voted upon and information about the
director candidates. The Board of Directors
shall designate one of the directors from such district to act as
chairman and the other director from such district to act as
secretary of the meeting, or in the absence of either, the members
present shall elect a chairman or secretary, as required. The presence of representatives of at least
ten percent (10%) of the total number of members of the Association
in each district shall constitute a quorum for the transaction of
business at each district meeting.
Section 6. Nominations and
Elections .
(a) All
candidates for election to the Board of Directors from Districts
Nos. 1 to 10, inclusive, shall be nominated and elected in the
following manner:
(i) At the district
meeting next before that at which candidates are to be elected to a
position on the board from such district, a nominating committee
shall be elected composed of one person from each state within the
district, each of which persons must be a trustee, director, or
manager of a member.
(ii) The Board of
Directors in its call for a district meeting, as provided in
Section 5 of this Article, shall specify the method of electing the
nominating committee.
(iii)
The nominating committee shall, at least 90 days before the
district meeting at which candidates for the Board are to be
elected, submit to the Secretary of this Association the names of
two or more nominees for each position in the District for which an
election is to be held, together with a statement as to each
nominee’s background, qualifications, availability, and
eligibility to serve, if elected.
(iv)
In the event a nominating committee has not been elected
