12 Cfr 701.3 (1-1-16 Ed)

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National Credit Union Administration

§ 701.3

§ 701.3 Member inspection of credit
union books, records, and minutes.
(a) Member inspection rights. A group
of members of a Federal credit union
has the right, upon submission of a petition to the credit union as described
in paragraph (b) of this section, to inspect and copy nonconfidential portions of the credit union’s:
(1) Accounting books and records;
and
(2) Minutes of the proceedings of the
credit union’s members, board of directors, and committees of directors.
(b) Petition for inspection. The petition
must describe the particular records to
be inspected and state a proper purpose
for the inspection, that is, a purpose
related to the protection of the members’ financial interests in the credit
union. The petition must state that the
petitioners as a whole, or certain
named petitioners, agree to pay the direct and reasonable costs associated
with search and duplication of requested material. The petition must
also state that the inspection is not desired for any purpose other than the
stated purpose; that the members signing the petition will not sell or offer
for sale any information obtained from
the credit union; and that the members
signing the petition have not within
five years preceding the signature date
sold or offered for sale any information
acquired from the credit union or aided
or abetted any person in procuring any
information from the credit union for
purposes of sale. The petition must

name one member, and one alternate
member, who will represent the petitioners on issues such as inspection
procedures, costs, and potential disputes. At least one percent of the credit union’s members, with a minimum of
20 members and a maximum of 500
members, must sign the petition. Each
member who signs the petition must
have been a member of the credit union
for at least 180 days at the time the petitioners submit the petition to the
credit union.
(c) Inspection procedures. (1) A Federal
credit union must respond to petitioners within 14 days of receiving a petition. In its response, a credit union
must inform petitioners either that it
will provide inspection of the requested
material and, if so, when, or, if a credit
union is going to withhold all or part
of the requested material, it must inform petitioners what part of the requested material it intends to withhold
and the reasons for withholding the requested material. As soon as possible
after receiving a petition, a credit
union must schedule inspection and
copying of nonconfidential requested
material it determines petitioners may
inspect and copy.
(2) Inspection may be made in person
or by agent or attorney and at any reasonable time or times. The credit union
may, at its option, skip inspection and
deliver copies of requested documents
directly to the petitioners. Member inspection rights under this section are
in addition to any other member inspection rights afforded by the credit
union’s charter or bylaws or other Federal law or Federal regulation.
(3) If the credit union denies inspection because the petitioners have failed
to obtain the minimum number of
valid signatures, the credit union must
inform the petitioners which signatures were not valid and why.
(d) Confidential books, records, and
minutes. Members do not have the right
to inspect any portion of the books,
records, or minutes of a Federal credit
union if:
(1) Federal law or regulation prohibits disclosure of that portion;
(2) The publication of that portion
could cause the credit union predictable and substantial financial harm;

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§ 701.4

12 CFR Ch. VII (1–1–16 Edition)

(3) That portion contains nonpublic
personal information as defined in 12
CFR 1016.3; or
(4) That portion contains information
about credit union employees or officials the disclosure of which would constitute a clearly unwarranted invasion
of personal privacy.
(e) Costs. A Federal credit union may
charge petitioners the direct and reasonable costs associated with search
and duplication. The credit union may
not charge for other costs, including
indirect costs or attorney’s fees.
(f) Dispute resolution. (1) In the event
of a dispute between a federal credit
union and its members concerning a
petition for inspection or the associated costs, either party may submit
the dispute to the regional director.
The regional director, after obtaining
the views of both parties, will direct
the credit union either to withhold the
disputed materials or to make them
available for member inspection and
copying. The regional director may
place conditions upon release. The decision of the regional director is a final
agency decision and is not appealable
to the Board.
(2) The regional director has the discretion to refer any dispute to the
credit union’s supervisory committee
for review and resolution. If petitioners
are not satisfied with the supervisory
committee’s response, they may resubmit the dispute to the regional director.

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[72 FR 56253, Oct. 3, 2007, as amended at 78 FR
32544, May 31, 2013]

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