Credit Union Governance Modernization Act of 2021

I 117TH CONGRESS 1ST SESSION H. R. 2311 To amend the Federal Credit Union Act to modernize certain processes regarding expulsion of credit union members for cause, and for other purposes. IN THE HOUSE OF REPRESENTATIVES APRIL 1, 2021 Mr. EMMER (for himself and Mr. PERLMUTTER) introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Federal Credit Union Act to modernize certain processes regarding expulsion of credit union members for cause, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Credit Union Govern- 4 ance Modernization Act of 2021’’. 5 SEC. 2. EXPULSION OF FEDERAL CREDIT UNION MEMBERS 6 FOR CAUSE. 7 Section 118(a) of the Federal Credit Union Act (12 8 U.S.C. 1764(a)) is amended to read as follows: 9 VerDate Sep 11 2014 04:15 May 26, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2311.IH H2311 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 2311 IH ‘‘(a) EXPULSION FOR CAUSE.— 1 ‘‘(1) IN GENERAL.—Except as provided in sub- 2 section (b) of this section, a member may be expelled 3 for cause pursuant to a policy adopted by a majority 4 vote of a quorum of the directors of the Federal 5 credit union and provided in written or electronic 6 form to all members of the Federal credit union. 7 ‘‘(2) PROCEDURES.— 8 ‘‘(A) NOTIFICATION OF PENDING EXPUL- 9 SION.—If a member will, subject to the policy 10 adopted under paragraph (1), be subject to ex- 11 pulsion, the member shall be notified in advance 12 of the expulsion, along with the reason for such 13 expulsion. Such notice shall be provided in writ- 14 ten form or, if the member has elected to re- 15 ceive electronic communications from the Fed- 16 eral credit union, may be provided electroni- 17 cally. 18 ‘‘(B) RIGHT TO A HEARING.— 19 ‘‘(i) IN GENERAL.—A member shall 20 have 15 days from the date of receipt of a 21 notification under subparagraph (A) to re- 22 quest a hearing from the board of directors 23 of the Federal credit union. 24 VerDate Sep 11 2014 04:15 May 26, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2311.IH H2311 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 2311 IH ‘‘(ii) EXPULSION IF NO HEARING.—If 1 a member does not request a hearing dur- 2 ing the 15-day period described under 3 clause (i), the member shall be expelled 4 after the end of the 15-day period. 5 ‘‘(C) HEARING; VOTE ON EXPULSION.—If 6 a member requests a hearing during the 15-day 7 period described under subparagraph (B)(i)— 8 ‘‘(i) the board of directors of the Fed- 9 eral credit union shall provide the member 10 with a hearing; and 11 ‘‘(ii) after such hearing, the board of 12 directors of the Federal credit union shall 13 hold a vote on expelling the member in a 14 timely manner. 15 ‘‘(D) NOTICE OF EXPULSION.—If a mem- 16 ber is expelled under subparagraph (B)(ii) or 17 (C)(ii), the member shall be provided with writ- 18 ten or electronic notice of the expulsion. 19 ‘‘(3) REINSTATEMENT.— 20 ‘‘(A) IN GENERAL.—A member expelled 21 under this subsection— 22 ‘‘(i) shall be given an opportunity to 23 request reinstatement of membership; and 24 VerDate Sep 11 2014 04:15 May 26, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2311.IH H2311 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 2311 IH ‘‘(ii) may be reinstated by a two- 1 thirds vote of the members of the Federal 2 credit union present at a meeting. 3 ‘‘(B) RULE OF CONSTRUCTION.—Nothing 4 in this paragraph may be construed to require 5 that an expelled member be allowed to attend 6 the meeting described in subparagraph (A)(ii) 7 in person. 8 ‘‘(4) CAUSE DEFINED.—In this subsection, the 9 term ‘cause’ includes— 10 ‘‘(A) a material loss to the Federal credit 11 union; 12 ‘‘(B) a violation of the membership agree- 13 ment of the Federal credit union; 14 ‘‘(C) a substantial disruption to the oper- 15 ations of a Federal credit union; and 16 ‘‘(D) fraud, attempted fraud, other illegal 17 behavior, or dangerous or abusive behavior, as 18 defined by the policy described in paragraph 19 (1), such as physical or verbal abuse of Federal 20 credit union members or staff.’’. 21 Æ VerDate Sep 11 2014 04:15 May 26, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H2311.IH H2311 kjohnson on DSK79L0C42PROD with BILLS