What This Bill Does
This bill modifies how often the boards of directors at federal credit unions must meet. The bill is called the Credit Union Board Modernization Act. It changes the meeting requirements based on how long a credit union has been operating and how well it is performing financially.
Who It Affects
Federal credit unions and their boards of directors.
Key Provisions
* During the first 5 years after a federal credit union receives approval, the board must meet at least once a month. (Sec. 2(b)(1))
* After the first 5 years, credit unions with the highest financial ratings (composite ratings of 1 or 2 under the Uniform Financial Institutions Rating System or an equivalent system) must meet at least 6 times per year, with at least 1 meeting during each fiscal quarter. (Sec. 2(b)(2)(A))
* After the first 5 years, credit unions with lower financial ratings (composite ratings of 3, 4, or 5 under the Uniform Financial Institutions Rating System or an equivalent system) must continue meeting at least once a month. (Sec. 2(b)(2)(B))
What Changes
The current requirement that all federal credit unions must meet monthly would be relaxed for well-performing, established credit unions. These strong credit unions could reduce their board meetings to 6 times per year instead. Newer or lower-performing credit unions would maintain monthly meetings.
Important Definitions
Composite rating: A financial health score assigned to credit unions under the Uniform Financial Institutions Rating System or a comparable rating system.
II
118TH CONGRESS
1ST SESSION
S. 610
To amend the Federal Credit Union Act to modify the frequency of board
of directors meetings, and for other purposes.
IN THE SENATE OF THE UNITED STATES
MARCH 1, 2023
Ms. SINEMA (for herself, Mr. HAGERTY, Mr. PADILLA, and Mr. TILLIS) intro-
duced the following bill; which was read twice and referred to the Com-
mittee on Banking, Housing, and Urban Affairs
A BILL
To amend the Federal Credit Union Act to modify the fre-
quency of board of directors meetings, and for other
purposes.
Be it enacted by the Senate and House of Representa-
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tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE.
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This Act may be cited as the ‘‘Credit Union Board
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Modernization Act’’.
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SEC. 2. FREQUENCY OF BOARD OF DIRECTORS MEETINGS.
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Section 113 of the Federal Credit Union Act (12
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U.S.C. 1761b) is amended—
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•S 610 IS
(1) in paragraph (15), by striking ‘‘monthly’’
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each place the term appears;
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(2) in the matter preceding paragraph (1), by
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striking ‘‘The board of directors’’ and inserting the
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following:
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‘‘(a) IN GENERAL.—The board of directors’’;
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(3) in subsection (a), as so designated, in the
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matter preceding paragraph (1), by striking ‘‘shall
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meet at least once a month and’’; and
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(4) by adding at the end the following:
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‘‘(b) MEETINGS.—The board of directors of a Federal
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credit union shall meet as follows:
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‘‘(1) Not less frequently than monthly during
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the 5-year period beginning on the date on which the
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organization certificate of the Federal credit union is
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approved.
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‘‘(2) After the expiration of the 5-year period
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described in paragraph (1)—
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‘‘(A) not less frequently than 6 times an-
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nually, with at least 1 meeting held during each
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fiscal quarter, with respect to a Federal credit
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union—
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‘‘(i) with composite rating of 1 or 2
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under the Uniform Financial Institutions
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•S 610 IS
Rating System (or an equivalent rating
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under a comparable rating system); and
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‘‘(ii) with a capability of management
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rating under the composite rating de-
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scribed in clause (i) of 1 or 2; and
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‘‘(B) not less frequently than monthly,
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with respect to a Federal credit union—
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‘‘(i) with composite rating of 3, 4, or
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5 under the Uniform Financial Institutions
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Rating System (or an equivalent rating
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under a comparable rating system); or
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‘‘(ii) with a capability of management
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rating under the composite rating de-
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scribed in clause (i) of 3, 4, or 5.’’.
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