I 

109TH CONGRESS 

1ST SESSION H. R. 2317

To modernize credit union net worth standards, advance credit union efforts 

to promote economic growth, and modify and ease credit union regulatory 

standards and burdens, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 12, 2005

Mr. ROYCE (for himself, Mr. KANJORSKI, Mr. LATOURETTE, Mrs. MALONEY, 

Mr. TANCREDO, Mr. SANDERS, Mr. BOEHLERT, Mr. GUTIERREZ, Mr. 

BURTON of Indiana, Mr. CASE, Mr. BROWN of South Carolina, Ms. 

JACKSON-LEE of Texas, Mr. PAUL, Mr. CHABOT, Mr. CANNON, Mr. 

CUNNINGHAM, Mr. KUHL of New York, and Mr. SHERMAN) introduced 

the following bill; which was referred to the Committee on Financial Services 

A BILL

To modernize credit union net worth standards, advance 

credit union efforts to promote economic growth, and 

modify and ease credit union regulatory standards and 

burdens, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Credit Union Regu5 latory Improvements Act of 2005’’. 
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1 TITLE I—CAPITAL REFORM 

2 SEC. 101. AMENDMENTS TO NET WORTH CATEGORIES. 

3 Section 216(c)(1) of the Federal Credit Union Act 

4 (12 U.S.C. 1790d(c)(1)) is amended as follows: 

5 (1) WELL CAPITALIZED.—

6 (A) In subparagraph (A)(i), by striking ‘‘7 

7 percent’’ and inserting ‘‘5 percent’’. 

8 (B) In subparagraph (A)(ii), by striking 

9 ‘‘it meets any applicable risk-based net worth 

10 requirement under subsection (d) of this sec11 tion’’ and inserting ‘‘it has a risk-based net 

12 worth ratio of not less than 8 percent’’. 

13 (2) ADEQUATELY CAPITALIZED.—

14 (A) In subparagraph (B)(i), by striking ‘‘6 

15 percent’’ and inserting ‘‘4 percent’’. 

16 (B) In subparagraph (B)(ii), by striking 

17 ‘‘it meets any applicable risk-based net worth 

18 requirement under subsection (d) of this sec19 tion’’ and inserting ‘‘it has a risk-based net 

20 worth ratio of not less than 8 percent’’. 

21 (3) UNDER CAPITALIZED.—

22 (A) In subparagraph (C)(i), by striking ‘‘6 

23 percent’’ and inserting ‘‘4 percent’’. 

24 (B) In subparagraph (C)(ii), by striking 

25 ‘‘it fails to meet any applicable risk-based net 
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1 worth requirement under subsection (d)’’ and 

2 inserting ‘‘it has a risk-based net worth ratio of 

3 less than 8 percent’’. 

4 (4) SIGNIFICANTLY UNDERCAPITALIZED.—

5 (A) In that portion of subparagraph (D) 

6 that precedes clause (i), by inserting ‘‘if’’ after 

7 ‘‘ ‘significantly undercapitalized’ ’’. 

8 (B) In subparagraph (D)(i)—

9 (i) by striking ‘‘if’’; 

10 (ii) by striking ‘‘4 percent’’ and in11 serting ‘‘3 percent’’; and 

12 (iii) by striking ‘‘or’’ after the semi13 colon. 

14 (C) By striking clause (ii) of subparagraph 

15 (D) and inserting the following new clauses: 

16 ‘‘(ii) the insured credit union has a 

17 risk-based net worth ratio of less than 6 

18 percent; or 

19 ‘‘(iii) the insured credit union has a 

20 net worth ratio of less than 4 percent, 

21 and—

22 ‘‘(I) fails to submit an acceptable 

23 net worth restoration plan within the 

24 time allowed under subsection (f); or 
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1 ‘‘(II) materially fails to imple2 ment a net worth restoration plan ac3 cepted by the Board.’’. 

4 (5) RELEVANT CAPITAL MEASURES.—Section 

5 216(c)(2) is amended by striking ‘‘leverage limit’’ 

6 and inserting ‘‘relevant capital measures’’. 

7 SEC. 102. AMENDMENTS RELATING TO RISK-BASED NET 

8 WORTH REQUIREMENTS. 

9 (a) IN GENERAL.—Section 216(d) of the Federal 

10 Credit Union Act (12 U.S.C. 1790d(d)) is amended—

11 (1) in paragraph (1)—

12 (A) by striking ‘‘that are complex, as de13 fined by the Board’’; and 

14 (B) by inserting ‘‘, as defined by the 

15 Board’’ before the period at the end; and 

16 (2) by striking paragraph (2) and inserting the 

17 following new paragraph: 

18 ‘‘(2) STANDARD.—The Board shall design the 

19 risk-based net worth requirement in relation to risk 

20 assets, as defined by the Board, to take account of 

21 any material risks to insured credit unions, based on 

22 comparable standards for taking into account mate23 rial risks to insured depository institutions under the 

24 Federal Deposit Insurance Act that are applicable to 

25 credit unions.’’. 
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1 (b) TECHNICAL AND CONFORMING AMENDMENT.—

2 The heading for subsection (d) of section 216 of the Fed3 eral Credit Union Act (12 U.S.C. 1790d(d)) is amended 

4 by striking ‘‘FOR COMPLEX CREDIT UNIONS’’. 

5 SEC. 103. TREATMENT BASED ON OTHER CRITERIA. 

6 Section 216(h)(2) of the Federal Credit Union Act 

7 (12 U.S.C. 1790d(h)(2)) is amended by inserting ‘‘, except 

8 to reclassify an insured credit union into the next lower 

9 net worth category, based on interest rate risk, to the ex10 tent any such reclassification by a delegatee may be re11 viewed by the Board,’’ after ‘‘to reclassify an insured cred12 it union into a lower net worth category’’. 

13 SEC. 104. DEFINITIONS RELATING TO NET WORTH. 

14 (a) NET WORTH.—Section 216(o)(2) of the Federal 

15 Credit Union Act (12 U.S.C. 1790d(o)(2)) is amended—

16 (1) in subparagraph (A)—

17 (A) by inserting ‘‘the’’ before ‘‘retained 

18 earnings balance’’; and 

19 (B) by inserting ‘‘, together with any 

20 amounts that were previously retained earnings 

21 of any other credit union with which the credit 

22 union has combined’’ before the semicolon at 

23 the end; and 

24 (2) in subparagraph (B), by inserting ‘‘, subject 

25 to paragraph (6),’’ after ‘‘includes’’. 
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1 (b) SECONDARY CAPITAL ACCOUNTS.—Section 

2 216(o) of the Federal Credit Union Act (12 U.S.C. 

3 1790d(o)) is amended by adding at the end the following 

4 new paragraph: 

5 ‘‘(6) SECONDARY CAPITAL ACCOUNTS FOR PUR6 POSES OF DETERMINING NET WORTH.—The Board 

7 may establish, by regulation, the following limita8 tions on the secondary capital accounts that may be 

9 included for purposes of determining the net worth 

10 of any low-income credit union pursuant to para11 graph (2)(B): 

12 ‘‘(A) A limitation on the initial maturity of 

13 any such account. 

14 ‘‘(B) A reduction or limitation on the net 

15 worth valuation of any such account based on 

16 the remaining period to maturity. 

17 ‘‘(C) Any other limitation the Board deter18 mines to be appropriate, for safety and sound19 ness purposes, with respect to credit unions 

20 that are not defined as small credit unions by 

21 the Board.’’. 

22 (c) NET WORTH RATIO.—Paragraph (3) of section 

23 216(o) of the Federal Credit Union Act (12 U.S.C. 

24 1790d(o)(3)) is amended—
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1 (1) by inserting ‘‘minus the credit union’s de2 posit in the Fund’’ after ‘‘net worth of the credit 

3 union’’; and 

4 (2) by inserting ‘‘minus the credit union’s de5 posit in the Fund’’ after ‘‘total assets of the credit 

6 union’’. 

7 (d) RISK-BASED NET WORTH RATIO.—Section 

8 216(o) of the Federal Credit Union Act (12 U.S.C. 

9 1790d)(o)) is amended by inserting after paragraph (4) 

10 the following new paragraph: 

11 ‘‘(5) RISK-BASED NET WORTH RATIO.—The 

12 term ‘risk-based net worth ratio’ means, with respect 

13 to any credit union, the ratio of—

14 ‘‘(A) the sum of the amount of the net 

15 worth of the credit union and the amount of the 

16 loan loss reserves held by the credit union (sub17 ject to such limits on the extent to which loan 

18 loss reserves may be taken into account for pur19 poses of determining such ratio as the Board 

20 may prescribe), minus the amount of the credit 

21 union’s deposit in the Fund; to 

22 ‘‘(B) the amount of the risk assets of the 

23 credit union, 

24 as defined by the Board by regulation.’’. 
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1 SEC. 105. AMENDMENTS RELATING TO NET WORTH RES2 TORATION PLANS. 

3 (a) SHORT-TERM WAIVER OF REQUIREMENT FOR

4 NET WORTH RESTORATION PLAN ALLOWED UNDER

5 CERTAIN CIRCUMSTANCES.—

6 (1) IN GENERAL.—Subsection (f) of section 216 

7 of the Federal Credit Union Act (12 U.S.C. 

8 1790d(f)) is amended by adding at the end the fol9 lowing new paragraph: 

10 ‘‘(6) SHORT-TERM WAIVER FOR CERTAIN MAR11 GINALLY UNDERCAPITALIZED CREDIT UNIONS.—The 

12 Board may, by order on a case-by-case basis, waive 

13 the applicability of the requirement for an under14 capitalized credit union to submit an acceptable net 

15 worth restoration plan to the Board if the Board de16 termines that—

17 ‘‘(A) the loss of adequately capitalized sta18 tus by the credit union is growth-related; 

19 ‘‘(B) the credit union is only marginally 

20 undercapitalized; and 

21 ‘‘(C) the credit union will only remain 

22 undercapitalized for a relatively short period of 

23 time.’’. 

24 (2) TECHNICAL AND CONFORMING AMEND25 MENT.—Paragraph (1) of section 216(f) of the Fed26 eral Credit Union Act (12 U.S.C. 1790d(f)(1)) is 
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1 amended by inserting ‘‘(other than a credit union for 

2 which an order under paragraph (6) is in effect)’’ 

3 after ‘‘credit union that is undercapitalized’’. 

4 (b) TREATMENT OF APPROVAL OF PLAN.—Para5 graph (2) of section 216(e) of the Federal Credit Union 

6 Act (12 U.S.C. 1790d(e)(2)) is amended by inserting ‘‘, 

7 or approve a net worth restoration plan of such credit 

8 union that by its terms provides for such a decrease,’’ 

9 after ‘‘to a credit union’’. 

10 (c) BOARD ACTION MAY INCLUDE ORDER TO CREDIT

11 UNION.—Subparagraph (B) of section 216(i)(1) of the 

12 Federal Credit Union Act (12 U.S.C. 1790d(i)(1)(B)) is 

13 amended—

14 (1) by inserting ‘‘, in the discretion of the 

15 Board,’’ after ‘‘as the Board’’; and 

16 (2) by inserting ‘‘including issuing an order to 

17 the credit union requiring the credit union to take 

18 action that the Board determines would achieve such 

19 purpose,’’ after ‘‘the purpose of this section,’’. 

20 (d) SUBSTITUTION OF 3-MONTH PERIOD FOR CAL21 ENDAR QUARTER.—Subparagraph (A) of section 

22 216(i)(3) of the Federal Credit Union Act (12 U.S.C. 

23 1790d(i)(3)(A)) is amended—

24 (1) by striking ‘‘calendar quarter’’ and insert25 ing ‘‘3-month period’’; and 
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1 (2) by inserting ‘‘first’’ after ‘‘the date on 

2 which the credit union’’. 

3 (e) CLARIFICATION OF COORDINATION REQUIRE4 MENT.—Clause (ii) of section 216(l)(3)(A) of the Federal 

5 Credit Union Act (12 U.S.C. 1790d(l)(3)(A)) is amended 

6 by inserting ‘‘if the Board determines that such action by 

7 the official will carry out the purposes of this section’’. 

8 TITLE II—ECONOMIC GROWTH 

9 SEC. 201. LIMITS ON MEMBER BUSINESS LOANS. 

10 Section 107A(a) of the Federal Credit Union Act (12 

11 U.S.C. 1757a(a)) is amended by striking ‘‘the lesser of—

12 ’’ and all that follows and inserting ‘‘20 percent of the 

13 total assets of the credit union.’’. 

14 SEC. 202. DEFINITION OF MEMBER BUSINESS LOAN. 

15 Section 107A(c)(1)(B)(iii) of the Federal Credit 

16 Union Act (12 U.S.C. 1757a(c)(1)(B)(iii)) is amended by 

17 striking ‘‘$50,000’’ and inserting ‘‘an amount, not to ex18 ceed $100,000, that the Board shall prescribe by regula19 tion’’. 

20 SEC. 203. RESTRICTION ON MEMBER BUSINESS LOANS. 

21 Section 216(g)(2) of the Federal Credit Union Act 

22 (12 U.S.C. 1790d(g)(2)) is amended by striking ‘‘until 

23 such time as the credit union becomes adequately capital24 ized’’ and inserting ‘‘unless otherwise approved by the 

25 Board’’. 
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1 SEC. 204. MEMBER BUSINESS LOAN EXCLUSION FOR LOANS 

2 TO NONPROFIT RELIGIOUS ORGANIZATIONS. 

3 Section 107A(a) of the Federal Credit Union Act (12 

4 U.S.C. 1757a(a)) is amended by inserting ‘‘, excluding 

5 loans made to nonprofit religious organizations,’’ after 

6 ‘‘total amount of such loans’’. 

7 SEC. 205. CREDIT UNIONS AUTHORIZED TO LEASE SPACE 

8 IN BUILDINGS IN CREDIT UNION OFFICES IN 

9 UNDERSERVED AREAS. 

10 Section 107 of the Federal Credit Union Act (12 

11 U.S.C. 1757) is amended—

12 (1) by striking ‘‘and’’ at the end of paragraph 

13 (16); 

14 (2) by redesignating paragraph (17) as para15 graph (18); 

16 (3) by inserting after paragraph (16) the fol17 lowing new paragraph: 

18 ‘‘(17) with regard to any building purchased or 

19 constructed by the credit union for a credit union of20 fice or credit union operations in an underserved 

21 area, to lease office space in such building that is 

22 separate and clearly distinct from any office or oper23 ation of the credit union to any business enterprise, 

24 subject to such regulations the Board may prescribe, 

25 taking into account the safety and soundness of the 

26 credit union; and’’; 
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1 (4) in the matter preceding paragraph (1) by 

2 striking ‘‘A Federal credit union’’ and inserting ‘‘(a) 

3 IN GENERAL.—Any Federal credit union’’; and 

4 (5) adding at the end the following new sub5 section: 

6 ‘‘(c) UNDERSERVED AREA DEFINED.—For purposes 

7 of subsection (a)(17), the term ‘underserved area’ means 

8 an area consisting of 1 or more census tracts that have—

9 ‘‘(1) a poverty rate of 20 percent or greater, 

10 based on the most recent census data; or 

11 ‘‘(2) a median family income that does not ex12 ceed 80 percent of the greater of—

13 ‘‘(A) the median family income for the 

14 metropolitan area in which such census tract or 

15 tracts are located; or 

16 ‘‘(B) the median family income for the 

17 State in which such census tract or tracts are 

18 located.’’. 

19 TITLE III—REGULATORY 

20 MODERNIZATION 

21 SEC. 301. LEASES OF LAND ON FEDERAL FACILITIES FOR 

22 CREDIT UNIONS. 

23 (a) IN GENERAL.—Section 124 of the Federal Credit 

24 Union Act (12 U.S.C. 1770) is amended—
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1 (1) by striking ‘‘Upon application by any credit 

2 union’’ and inserting ‘‘Notwithstanding any other 

3 provision of law, upon application by any credit 

4 union’’; 

5 (2) by inserting ‘‘on lands reserved for the use 

6 of, and under the exclusive or concurrent jurisdiction 

7 of, the United States or’’ after ‘‘officer or agency of 

8 the United States charged with the allotment of 

9 space’’; 

10 (3) by inserting ‘‘lease land or’’ after ‘‘such of11 ficer or agency may in his or its discretion’’; and 

12 (4) by inserting ‘‘or the facility built on the 

13 leased land’’ after ‘‘credit union to be served by the 

14 allotment of space’’. 

15 (b) CLERICAL AMENDMENT.—The heading for sec16 tion 124 is amended by inserting ‘‘OR ON FEDERAL LAND’’ 

17 after ‘‘BUILDINGS’’. 

18 SEC. 302. INVESTMENTS IN SECURITIES BY FEDERAL CRED19 IT UNIONS. 

20 Section 107 of the Federal Credit Union Act (12 

21 U.S.C. 1757) (as amended by section 205 of this Act) is 

22 amended by inserting after subsection (a) the following 

23 new subsection: 

24 ‘‘(b) INVESTMENT FOR THE CREDIT UNION’S OWN

25 ACCOUNT.—
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1 ‘‘(1) IN GENERAL.—In addition to the invest2 ments authorized in subsection (a), a Federal credit 

3 union may purchase and hold for its own account 

4 such investment securities of investment grade as 

5 the Board may authorize by regulation, subject to 

6 such limitations and restrictions as the Board may 

7 prescribe in the regulations. 

8 ‘‘(2) PERCENTAGE LIMITATIONS.—

9 ‘‘(A) SINGLE OBLIGOR.—In no event may 

10 the total amount of investment securities of any 

11 single obligor or maker held by a Federal credit 

12 union for the credit union’s own account exceed 

13 at any time an amount equal to 10 percent of 

14 the net worth of the credit union. 

15 ‘‘(B) AGGREGATE INVESTMENTS.—In no 

16 event may the aggregate amount of investment 

17 securities held by a Federal credit union for the 

18 credit union’s own account exceed at any time 

19 an amount equal to 10 percent of the assets of 

20 the credit union. 

21 ‘‘(3) INVESTMENT SECURITY DEFINED.—

22 ‘‘(A) IN GENERAL.—For purposes of this 

23 subsection, the term ‘investment security’ 

24 means marketable obligations evidencing the in25 debtedness of any person in the form of bonds, 
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1 notes, or debentures and other instruments 

2 commonly referred to as investment securities. 

3 ‘‘(B) FURTHER DEFINITION BY BOARD.—

4 The Board may further define the term ‘invest5 ment security’. 

6 ‘‘(4) INVESTMENT GRADE DEFINED.—The term 

7 ‘investment grade’ means with respect to an invest8 ment security purchased by a credit union for its 

9 own account, an investment security that at the time 

10 of such purchase is rated in one of the 4 highest rat11 ing categories by at least 1 nationally recognized 

12 statistical rating organization. 

13 ‘‘(5) CLARIFICATION OF PROHIBITION ON

14 STOCK OWNERSHIP.—No provision of this subsection 

15 shall be construed as authorizing a Federal credit 

16 union to purchase shares of stock of any corporation 

17 for the credit union’s own account, except as other18 wise permitted by law.’’. 

19 SEC. 303. INCREASE IN GENERAL 12-YEAR LIMITATION OF 

20 TERM OF FEDERAL CREDIT UNION LOANS TO 

21 15 YEARS. 

22 Section 107(a)(5) of the Federal Credit Union Act 

23 (12 U.S.C. 1757(5)) (as so designated by section 205 of 

24 this Act) is amended—
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1 (1) in the matter preceding subparagraph (A), 

2 by striking ‘‘to make loans, the maturities of which 

3 shall not exceed twelve years except as otherwise 

4 provided herein’’ and inserting ‘‘to make loans, the 

5 maturities of which shall not exceed 15 years or any 

6 longer maturity as the Board may allow, in regula7 tions, except as otherwise provided in this Act’’; 

8 (2) in subparagraph (A)—

9 (A) by striking clause (ii); 

10 (B) by redesignating clauses (iii) through 

11 (x) as clauses (ii) through (ix), respectively; and 

12 (C) by inserting ‘‘and’’ after the semicolon 

13 at the end of clause (viii) (as so redesignated). 

14 SEC. 304. INCREASE IN 1 PERCENT INVESTMENT LIMIT IN 

15 CREDIT UNION SERVICE ORGANIZATIONS. 

16 Section 107(a)(7)(I) of the Federal Credit Union Act 

17 (12 U.S.C. 1757(7)(I)) (as so designated by section 205 

18 of this Act) is amended by striking ‘‘up to 1 per centum 

19 of the total paid’’ and inserting ‘‘up to 3 percent of the 

20 total paid’’. 
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1 SEC. 305. CHECK CASHING AND MONEY TRANSFER SERV2 ICES OFFERED WITHIN THE FIELD OF MEM3 BERSHIP. 

4 Paragraph (12) of section 107(a) of the Federal 

5 Credit Union Act (12 U.S.C. 1757(12)) (as so designated 

6 by 205 of this Act) is amended to read as follows: 

7 ‘‘(12) in accordance with regulations prescribed 

8 by the Board—

9 ‘‘(A) to sell, to persons in the field of 

10 membership, negotiable checks (including trav11 elers checks), money orders, and other similar 

12 money transfer instruments (including inter13 national and domestic electronic fund trans14 fers); and 

15 ‘‘(B) to cash checks and money orders and 

16 receive international and domestic electronic 

17 fund transfers for persons in the field of mem18 bership for a fee;’’. 

19 SEC. 306. VOLUNTARY MERGERS INVOLVING MULTIPLE 

20 COMMON-BOND CREDIT UNIONS. 

21 Section 109(d)(2) of the Federal Credit Union Act 

22 (12 U.S.C. 1759(d)(2)) is amended—

23 (1) by striking ‘‘or’’ at the end of clause (ii) of 

24 subparagraph (B); 

25 (2) by striking the period at the end of sub26 paragraph (C) and inserting ‘‘; or’’; and 
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1 (3) by adding at the end the following new sub2 paragraph: 

3 ‘‘(D) a merger involving any such Federal 

4 credit union approved by the Board on or after 

5 August 7, 1998.’’. 

6 SEC. 307. CONVERSIONS OF CERTAIN CREDIT UNIONS TO A 

7 COMMUNITY CHARTER. 

8 Section 109(g) of the Federal Credit Union Act (12 

9 U.S.C. 1759(g)) is amended by inserting after paragraph 

10 (2) the following new paragraph: 

11 ‘‘(3) CRITERIA FOR CONTINUED MEMBERSHIP

12 OF CERTAIN MEMBER GROUPS IN COMMUNITY CHAR13 TER CONVERSIONS.—In the case of a voluntary con14 version of a credit union described in paragraph (1) 

15 or (2) of subsection (b) into a community credit 

16 union described in subsection (b)(3), the Board shall 

17 prescribe, by regulation, the criteria under which the 

18 Board may determine that a member group or other 

19 portion of a credit union’s existing membership, that 

20 is located outside the well-defined local community, 

21 neighborhood, or rural district that shall constitute 

22 the community charter, can be satisfactorily served 

23 by the credit union and remain within the commu24 nity credit union’s field of membership permitting 

25 new members to be added from such groups.’’. 
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1 SEC. 308. CREDIT UNION GOVERNANCE. 

2 (a) EXPULSION OF MEMBERS FOR JUST CAUSE.—

3 Subsection (b) of section 118 of the Federal Credit Union 

4 Act (12 U.S.C. 1764(b)) is amended to read as follows: 

5 ‘‘(b) POLICY AND ACTIONS OF BOARDS OF DIREC6 TORS OF FEDERAL CREDIT UNIONS.—

7 ‘‘(1) EXPULSION OF MEMBERS FOR NON8 PARTICIPATION OR FOR JUST CAUSE.—The board of 

9 directors of a Federal credit union may, by majority 

10 vote of a quorum of directors, adopt and enforce a 

11 policy with respect to expulsion from membership, 

12 by a majority vote of such board of directors, based 

13 on just cause, including disruption of credit union 

14 operations, or on nonparticipation by a member in 

15 the affairs of the credit union. 

16 ‘‘(2) WRITTEN NOTICE OF POLICY TO MEM17 BERS.—If a policy described in paragraph (1) is 

18 adopted, written notice of the policy as adopted and 

19 the effective date of such policy shall be provided 

20 to—

21 ‘‘(A) each existing member of the credit 

22 union not less than 30 days prior to the effec23 tive date of such policy; and 

24 ‘‘(B) each new member prior to or upon 

25 applying for membership.’’. 
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1 (b) TERM LIMITS AUTHORIZED FOR BOARD MEM2 BERS OF FEDERAL CREDIT UNIONS.—Section 111(a) of 

3 the Federal Credit Union Act (12 U.S.C. 1761(a)) is 

4 amended by adding at the end the following new sentence: 

5 ‘‘The bylaws of a Federal credit union may limit the num6 ber of consecutive terms any person may serve on the 

7 board of directors of such credit union.’’. 

8 (c) REIMBURSEMENT FOR LOST WAGES DUE TO

9 SERVICE ON CREDIT UNION BOARD NOT TREATED AS

10 COMPENSATION.—Section 111(c) of the Federal Credit 

11 Union Act (12 U.S.C. 1761(c)) is amended by inserting 

12 ‘‘, including lost wages,’’ after ‘‘the reimbursement of rea13 sonable expenses’’. 

14 SEC. 309. PROVIDING THE NATIONAL CREDIT UNION AD15 MINISTRATION WITH GREATER FLEXIBILITY 

16 IN RESPONDING TO MARKET CONDITIONS. 

17 Section 107(a)(5)(A)(vi)(I) of the Federal Credit 

18 Union Act (12 U.S.C. 1757(5)(A)(vi)(I)) (as so designated 

19 and amended by sections 205 and 303 of this Act) is 

20 amended by striking ‘‘six-month period and that prevailing 

21 interest rate levels’’ and inserting ‘‘6-month period or that 

22 prevailing interest rate levels’’. 
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1 SEC. 310. CREDIT UNION CONVERSION VOTING REQUIRE2 MENTS. 

3 Section 205(b)(2)(B) of the Federal Credit Union 

4 Act (12 U.S.C. 1785(b)(2)(B)) is amended by inserting 

5 ‘‘, in a vote in which at least 20 percent of the credit union 

6 membership participates’’ before the period at the end. 

7 SEC. 311. EXEMPTION FROM PRE-MERGER NOTIFICATION 

8 REQUIREMENT OF THE CLAYTON ACT. 

9 Section 7A(c)(7) of the Clayton Act (15 U.S.C. 

10 18a(c)(7)) is amended by inserting ‘‘section 205(b)(3) of 

11 the Federal Credit Union Act (12 U.S.C. 1785(b)(3)),’’ 

12 before ‘‘or section 3’’. 

13 SEC. 312. TREATMENT OF CREDIT UNIONS AS BANKS 

14 UNDER SECURITIES LAWS. 

15 (a) DEFINITION OF BANK UNDER THE SECURITIES

16 EXCHANGE ACT OF 1934.—Section 3(a)(6) of the Securi17 ties Exchange Act of 1934 (15 U.S.C. 78c(a)(6)) is 

18 amended—

19 (1) by striking ‘‘this title, and (D) a receiver’’ 

20 and inserting ‘‘this title, (D) an insured credit union 

21 (as defined in section 101(7) of the Federal Credit 

22 Union Act) but only for purposes of paragraphs (4) 

23 and (5) of this subsection and only for activities oth24 erwise authorized by applicable laws to which such 

25 credit unions are subject, and (E) a receiver’’; and 
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1 (2) in subparagraph (E) (as so redesignated by 

2 paragraph (1) of this subsection) by striking ‘‘(A), 

3 (B), or (C)’’ and inserting ‘‘(A), (B), (C), or (D)’’. 

4 (b) DEFINITION OF BANK UNDER THE INVESTMENT

5 ADVISERS ACT OF 1940.—Section 202(a)(2) of the In6 vestment Advisers Act of 1940 (15 U.S.C. 80b–2(a)(2)) 

7 is amended—

8 (1) by striking ‘‘this title, and (D) a receiver’’ 

9 and inserting ‘‘this title, (D) an insured credit union 

10 (as defined in section 101(7) of the Federal Credit 

11 Union Act) but only for activities otherwise author12 ized by applicable laws to which such credit unions 

13 are subject, and (E) a receiver’’; and 

14 (2) in subparagraph (E) (as so redesignated by 

15 paragraph (1) of this subsection) by striking ‘‘(A), 

16 (B), or (C)’’ and inserting ‘‘(A), (B), (C), or (D)’’. 

17 (c) DEFINITION OF APPROPRIATE FEDERAL BANK18 ING AGENCY UNDER THE SECURITIES EXCHANGE ACT OF

19 1934.—Section 3(a)(34) of the Securities Exchange Act 

20 of 1934 (15 U.S.C. 78c(a)(34)) is amended—

21 (1) in subparagraph (A)—

22 (A) by striking ‘‘and’’ at the end of clause 

23 (iii); 

24 (B) by redesignating clause (iv) as clause 

25 (v); and 
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1 (C) by inserting the following new clause 

2 after clause (iii): 

3 ‘‘(iv) the National Credit Union Ad4 ministration Board, in the case of an in5 sured credit union (as defined in section 

6 101(7) of the Federal Credit Union Act) or 

7 a subsidiary or a department or division of 

8 any such insured credit union; and’’; 

9 (2) in subparagraph (B)—

10 (A) by striking ‘‘and’’ at the end of clause 

11 (iii); 

12 (B) by redesignating clause (iv) as clause 

13 (v); and 

14 (C) by inserting the following new clause 

15 after clause (iii): 

16 ‘‘(iv) the National Credit Union Ad17 ministration Board, in the case of an in18 sured credit union (as defined in section 

19 101(7) of the Federal Credit Union Act) or 

20 a subsidiary of any such insured credit 

21 union; and’’; 

22 (3) in subparagraph (C)—

23 (A) by striking ‘‘and’’ at the end of clause 

24 (iii); 
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•HR 2317 IH 

1 (B) by redesignating clause (iv) as clause 

2 (v); and 

3 (C) by inserting the following new clause 

4 after clause (iii): 

5 ‘‘(iv) the National Credit Union Ad6 ministration Board, in the case of an in7 sured credit union (as defined in section 

8 101(7) of the Federal Credit Union Act) or 

9 a subsidiary of any such insured credit 

10 union; and’’; 

11 (4) in subparagraph (D)—

12 (A) by striking ‘‘and’’ at the end of clause 

13 (ii); 

14 (B) by redesignating clause (iii) as clause 

15 (iv); and 

16 (C) by inserting the following new clause 

17 after clause (ii): 

18 ‘‘(iii) the National Credit Union Ad19 ministration Board, in the case of an in20 sured credit union (as defined in section 

21 101(7) of the Federal Credit Union Act); 

22 and’’; and 

23 (5) in subparagraph (F)—
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•HR 2317 IH 

1 (A) by redesignating clauses (ii), (iii), and 

2 (iv) as clauses (iii), (iv), and (v), respectively; 

3 and 

4 (B) by inserting the following new clause 

5 after clause (i): 

6 ‘‘(ii) the National Credit Union Ad7 ministration Board, in the case of an in8 sured credit union (as defined in section 

9 101(7) of the Federal Credit Union Act);’’. 

10 (d) DEFINITION OF APPROPRIATE FEDERAL BANK11 ING AGENCY UNDER THE INVESTMENT ADVISERS ACT OF

12 1940.—Section 210A(c) of the Investment Advisers Act 

13 of 1940 (15 U.S.C. 80b–10a(c)) is amended by inserting 

14 ‘‘and includes the National Credit Union Administration 

15 Board, in the case of an insured credit union (as defined 

16 in section 101(7) of the Federal Credit Union Act)’’ before 

17 the period at the end.

Æ