Mr. Michael Edwards:

In respect of term limitations, while some credit union systems have a voluntary provision that if a credit union wishes to adopt term limits it may so do, we are not aware of any countries that have specific de jure terms such as those being proposed here. Frankly, this raises some safety and soundness concerns, since the role of the board is to control the credit union and manage risk. If one is just a man off the street, one does not know much about the operations of a financial institution and the way one learns about it is through experience or education. While some credit union directors may not have acquired that sort of background, there are very many who have and without a lot of experience and education one would not be able to understand the true financial position of the credit union or otherwise manage risk. In addition, our model law for credit unions contains an interpretive note I think may have been misconstrued by some people. It states, not in the statutory text but in the commentary, that some credit unions have decided to go with term limits and that if term limits are desired, they should be specified in the by-laws. Some people have read the final sentence of that note out of context, as stating it should be mandatory. This was not the intent when we revised it in 2011 or in 2008. Had it been, it would have been in the statutory text itself and not in the interpretive notes. If one is to have term limits, they must be written down someplace, and that would be in the by-laws, but in our view, it would not be a mandatory thing. In fact, that would be detrimental.