To amend the Federal Credit Union Act provisions relating to any conversion of a credit union charter to a mutual savings bank or savings association charter, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Credit Union Charter Choice Act''.

SEC. 2. CONVERSIONS OF CREDIT UNIONS TO SAVINGS ASSOCIATIONS OR MUTUAL 
              SAVINGS BANKS.

    (a) In General.--Section 205(b)(2) of the Federal Credit Union Act 
( 12 U.S.C. 1785(b)) is amended--
            (1) in subparagraph (G)--
                    (A) by striking ``Consistent rules'' in the heading 
                of such subparagraph and all that follows through ``, 
                the Administration shall promulgate'' (where such term 
                appears in clause (i) of such subparagraph) and 
                inserting ``Consistent rules.--The Board shall 
                prescribe''; and
                    (B) by striking clause (ii);
            (2) by redesignating subparagraphs (E), (F), and (G) (as 
        amended by paragraph (1)) as subparagraphs (K), (L), and (M), 
        respectively; and
            (3) by striking subparagraph (D) and inserting the 
        following new subparagraphs:
                    ``(D) Notice of proposal to board.--An insured 
                credit union that proposes to convert to a mutual 
                savings bank or savings association under subparagraph 
                (A) shall submit to the Board, or a designee of the 
                Board, for review and approval by the Board or such 
                designee a copy of the written notice, ballot and such 
                other materials to be mailed to members pursuant to 
                subparagraph (C).
                    ``(E) Contents of notice to board.--In addition to 
                the requirements of subparagraph (D), a notice 
                submitted under such subparagraph shall include the 
                following:
                            ``(i) The date that the membership vote 
                        will be taken and the date by which ballots 
                        must be received by the inspector of elections 
                        to be counted.
                            ``(ii) A brief statement of why the 
                        directors of the converting credit union are 
                        considering the conversion and the board's 
                        recommendation to the members of the credit 
                        union.
                            ``(iii) A brief statement of the material 
                        effects of the conversion on the credit union, 
                        as converted, and the members of the credit 
                        union, including any differences in powers 
                        between a credit union and a mutual savings 
                        bank or savings association that the converting 
                        credit union deems to be material to such 
                        members.
                    ``(F) Restrictions on regulation of content of 
                proposed conversion notice to members.--A converting 
                credit union may not be required to include in the 
                notice provided under subparagraph (C) any information 
                or statements that--
                            ``(i) are speculative with respect to the 
                        future operations, governance, or form of 
                        organization of the financial institution that 
                        will result from the conversion, or may occur 
                        after the completion of the conversion;
                            ``(ii) are inaccurate with respect to a 
                        proposed conversion of the converting credit 
                        union or the application for a mutual savings 
                        bank or savings association charter filed in 
                        connection with the conversion;
                            ``(iii) conflict with regulations of other 
                        financial regulators, including the Director of 
                        the Office of Thrift Supervision, related to 
                        the subsequent conversion of the resulting 
                        financial institution from mutual to stock 
                        form;
                            ``(iv) distort the impact of conversion on 
                        the members of the credit union; or
                            ``(v) are attributable to the Board or 
                        state the Board's position on conversions.
                    ``(G) Board approval process.--
                            ``(i) In general.--The Board shall approve 
                        the materials submitted by the converting 
                        credit union pursuant to subparagraph (D) if 
                        such materials comply with the requirements of 
                        subparagraph (E), unless the Board determines 
                        that the conversion is being made to circumvent 
                        a pending supervisory action that is about to 
                        be or has been initiated by the Board or by the 
                        State board, commission, or authority having 
                        jurisdiction over the credit union, in the case 
                        of converting State-chartered credit union, 
                        because of a concern over the safety and 
                        soundness of the converting credit union.
                            ``(ii) Notice within 30 days.--The Board, 
                        or the designee of the Board, shall provide the 
                        converting credit union with written approval 
                        of the materials submitted by a converting 
                        credit union pursuant to subparagraph (D) or 
                        comments thereto within 30 days of the initial 
                        receipt by the Board or such designee of such 
                        materials.
                            ``(iii) Revisions to notice.--Any revised 
                        materials filed with the Board by a converting 
                        credit union shall be acted upon by the later 
                        of the end of the 30-day period referred to in 
                        clause (ii) or the end of the 10-day period 
                        beginning when such revised materials are 
                        filed.
                    ``(H) Other restrictions on the board.--
                            ``(i) Prohibition on submission and review 
                        of other communications with members.--Other 
                        than the written materials being mailed to the 
                        converting credit union's members pursuant to 
                        subparagraph (C), the converting credit union 
                        shall not be required to submit any other 
                        communications involving the conversion to the 
                        Board for approval and the Board shall have no 
                        authority to regulate the content of any such 
                        communications.
                            ``(ii) Exception for inconsistent, 
                        misleading, or false communications.--Clause 
                        (i) shall not apply so as to to restrict the 
                        Board's authority to prevent or correct 
                        communications under subparagraph (C) that are 
                        inconsistent with the material facts contained 
                        in the notice of proposed conversion or are 
                        knowingly false or misleading.
                            ``(iii) Limitation on authority to require 
                        new membership vote.--The Board shall not have 
                        the authority to require a new vote on the 
                        basis of the contents of the notice required 
                        under subparagraph (C) or any other 
                        communication from the converting insured 
                        credit union to the members of the credit 
                        union, unless the notice or communication 
                        contains a knowingly false statement that 
                        affects the outcome of a conversion vote.
                    ``(I) Conduct and supervision of election.--
                            ``(i) Secret ballot.--The vote on the 
                        conversion shall be conducted by secret ballot.
                            ``(ii) Independent inspector of election.--
                                    ``(I) In general.--The converting 
                                credit union shall appoint an 
                                independent inspector of elections to 
                                receive and tally the votes cast on the 
                                conversion proposal.
                                    ``(II) Ineligible persons.--The 
                                inspector shall not be an employee, 
                                officer, or director of the converting 
                                credit union or have a family 
                                relationship with any employee, officer 
                                or director of the credit union.
                                    ``(III) Family relationship 
                                defined.--For purposes of subclause 
                                (II), the term `family relationship' 
                                means any relationship by blood, 
                                marriage or adoption, that is not more 
                                remote than first cousin.
                            ``(iii) Certification.--The board of 
                        directors of the converting credit union shall 
                        certify to the Board (or the designee of the 
                        Board) and the Federal banking agency or the 
                        appropriate State bank supervisor (as such 
                        terms are defined in section 3 of the Federal 
                        Deposit Insurance Act) that will have 
                        jurisdiction over the institution after the 
                        conversion--
                                    ``(I) the results of the membership 
                                vote, based on the report of the 
                                inspector of elections, within 10 
                                calendar days after the vote is taken 
                                or as promptly thereafter as possible; 
                                and
                                    ``(II) at the same time, that the 
                                notice, ballot and other written 
                                materials provided to members were 
                                identical in all material respects to 
                                those submitted to the Board (or the 
                                designee of the Board) pursuant to 
                                subparagraph (D) and approved by the 
                                Board or such designee.
                    ``(J) Restriction on post-election review or 
                approval.--Absent fraud or reckless disregard for 
                fairness during the voting process that affects the 
                outcome of the vote, the Board shall have no further 
                review or approval authority over the conversion 
                process following the submission and review of the 
                certification under subparagraph (I)(iii).''.
    (b) Effective Date.--The amendments made by this Act shall apply to 
all credit union conversions described in section 205(b)(2) of the 
Federal Credit Union Act that are pending on the date of the enactment 
of this Act and any conversion commenced on or after such date of 
enactment pursuant to a notice provided to the National Credit Union 
Administration Board in accordance with section 205(b)(2)(D) of the 
Federal Credit Union Act (as amended by subsection (a) of this 
section).
    (c) Regulations.--Before the end of the 60-day period beginning on 
the date of the enactment of this Act, the National Credit Union 
Administration Board shall publish proposed amendments to existing 
regulations of the Board governing conversions of insured credit unions 
to mutual savings banks or savings associations that are necessary to 
conform such regulations with the requirements of the amendments made 
by this Act.

Summary: Credit Union Charter Choice Act - Amends the Federal Credit Union Act to repeal requirements governing oversight by the National Credit Union Administration of the member vote concerning charter conversions of credit unions to mutual savings banks or savings associations. Revamps requirements governing credit union notification to the National Credit Union Administration Board of intent to convert to a mutual savings bank or savings association. Sets forth a Board approval process regarding materials submitted by converting credit unions in connection with such conversions. Requires the member vote on a proposed conversion to be conducted by secret ballot, with an independent inspector of elections appointed by the converting credit union to receive and tally the votes. Requires the board of directors of the converting credit union to certify vote results to the Board. Denies the Board any further review or approval authority over the conversion process, absent fraud or reckless disregard for fairness during the voting process that affects the vote outcome.