As mandated by Congress, #NCUA proposed a new rule on how #creditunions can expel members for dangerous or abusive behavior. In this episode of With Flying Colors I discuss the highlights of the meeting and the proposal, such as: Board members highlighted that these should be used infrequently and that credit unions are about inclusion and not exclusion. whether or not credit unions can expel a member for causing a loss, Virtual meeting options, ,What is required in the notice to the member if expulsion is being proposed, and much more. This soundbite from Vice Chairman Kyle Hauptman summarizes the rule with a great analogy. Reach out if you would like to discuss how my team and I assist credit unions with NCUA so you save time and money.
The proposed rule can be found here:
NCUA's Board Action Bulletin stated:
Proposed Rule on Member Expulsion Mandated by Congress
The NCUA Board unanimously approved a proposed rule(opens new window) that would amend the standard federal credit union (FCU) bylaws to adopt a policy by which a FCU member may be expelled for cause by a two-thirds vote of a quorum of the FCU’s board of directors. Currently, a credit union could expel a credit union member in two ways: by a two-thirds vote of the membership present at a special meeting called for that purpose, and for non-participation in the affairs of the credit union as specified in a policy adopted and enforced by the board.
NCUA Chairman Todd M. Harper said, “While there are admittedly times in which the expulsion of a member is necessary to protect credit union members and staff, this is a power that credit unions should rarely use. That’s because the Federal Credit Union Act exists so that people, particularly those of modest means, can access safe, fair, and affordable financial services. That is the statutory mission of credit unions. So, in acting today, we want to preserve this guiding principle.”
Under the Credit Union Governance Modernization Act of 2022, enacted by Congress on March 15, 2022, the NCUA has until September 15, 2023, to deve1op a final rule that FCUs may adopt to expel a member for cause.
Comments on the proposed rule(opens new window) must be received 60 days after publication in the Federal Register.
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