Section 12. The business and affairs of a credit union shall be managed by a board of not less than 7 directors. A credit union may limit the number of employees serving as directors in its by-laws. The directors shall be elected at the annual meetings. All members of said board shall be sworn to the faithful performance of their duties and shall hold their several offices unless sooner removed as hereinafter provided, until their successors are qualified. A record of every such qualification shall be filed and preserved with the records of the corporation. Directors shall be elected for not less than one nor more than three years, as the by-laws shall provide.

The office of any director who seeks, or against whom, an order of relief is entered, in a personal capacity, pursuant to Title 11 of the United States Code, or who, on examination in a supplementary process proceeding, has been found unable to pay a judgment, shall thereby be vacated. A record of any such vacancy shall be entered upon the books of the corporation. Any director whose office is so vacated shall again be eligible to serve as a director upon the receipt of a discharge in bankruptcy under chapter 7, the completion of all payments required pursuant to a plan of reorganization under chapter 11, the completion of all payments under a plan of debt adjustment under chapter 13, or the payment of the judgment.

If the term is more than one year, they shall be divided into classes, and an equal number, as nearly as may be, elected each year. If a director ceases to be a member of the credit union, his office shall thereupon become vacant. The by-laws may authorize the continuance, as honorary directors, of those persons who shall have served as directors for ten years or more. No such honorary director shall be deemed to be an officer or member of the board of directors of such corporation, nor shall he receive compensation or be required to attend meetings or be authorized to perform any duties.