I 

110TH CONGRESS 

1ST SESSION H. R. 1537 

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

to promote economic growth, and modify credit union regulatory standards and reduce burdens, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 15, 2007 

Mr. KANJORSKI (for himself, Mr. ROYCE, Mrs. MALONEY of New York, Mr. 

LATOURETTE, Mr. SHERMAN, Mr. BURTON of Indiana, Mr. GUTIERREZ, 

Mr. PAUL, Mrs. NAPOLITANO, Mr. CHABOT, Mr. ORTIZ, and Mr. CALVERT) 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 credit union regulatory standards and reduce 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 2007’’. 


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1 TITLE I—CAPITAL 

2 MODERNIZATION 

3 SEC. 101. AMENDMENTS TO NET WORTH CATEGORIES. 

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

5 (12 U.S.C. 1790d(c)(1)) is amended as follows: 

6 (1) WELL CAPITALIZED.— 

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

8 percent’’ and inserting ‘‘5.25 percent’’. 

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

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

11 requirement under subsection (d) of this sec12 tion’’ and inserting ‘‘it has a risk-based net 

13 worth ratio of not less than 10 percent’’. 

14 (2) ADEQUATELY CAPITALIZED.— 

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

16 percent’’ and inserting ‘‘4.25 percent’’. 

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

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

19 requirement under subsection (d) of this sec20 tion’’ and inserting ‘‘it has a risk-based net 

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

22 (3) UNDERCAPITALIZED.— 

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

24 percent’’ and inserting ‘‘4.25 percent’’. 


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

2 ‘‘it fails to meet any applicable risk-based net 

3 worth requirement under subsection (d)’’ and 

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

5 less than 8 percent’’. 

6 (4) SIGNIFICANTLY UNDERCAPITALIZED.—By 

7 striking subparagraph (D) and inserting the fol8 lowing new subparagraph: 

9 ‘‘(D) SIGNIFICANTLY UNDERCAPITAL10 IZED.—An insured credit union is ‘significantly 

11 undercapitalized’ if— 

12 ‘‘(i) the credit union has a net worth 

13 ratio of less than 3.25 percent; 

14 ‘‘(ii) the credit union has a net worth 

15 ratio of less than 4.25 percent and ei16 ther— 

17 ‘‘(I) fails to submit an acceptable 

18 net worth restoration plan within the 

19 time allowed under subsection (f); or 

20 ‘‘(II) materially fails to imple21 ment a net worth restoration plan ap22 proved by the Board; or 

23 ‘‘(iii) the credit union has a risk-based 

24 net worth ratio of less than 6 percent.’’. 


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1 (5) RELEVANT CAPITAL MEASURES.—Section 

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

3 each place such term appears and inserting ‘‘rel4 evant capital measures’’. 

5 (6) ADJUSTMENT BY FEDERAL DEPOSIT INSUR6 ANCE CORPORATION.—Section 216(c)(2)(A) is 

7 amended— 

8 (A) by striking ‘‘Federal banking agencies 

9 increase or decrease’’ and inserting ‘‘Federal 

10 Deposit Insurance Corporation increases or de11 creases one of’’; and 

12 (B) by striking ‘‘level’’ each place such 

13 term appears and inserting ‘‘levels’’. 

14 (7) ADJUSTING NET WORTH LEVELS.—Section 

15 216(c)(2)(A) is amended by striking ‘‘not more than 

16 the difference between the required minimum level 

17 most recently established by the Federal banking 

18 agencies and 4 percent of total assets (with respect 

19 to institutions regulated by those agencies)’’ and in20 serting ‘‘the increase or decrease made by the Fed21 eral Deposit Insurance Corporation’’. 

22 (8) CONSULTATION WITH FEDERAL DEPOSIT

23 INSURANCE CORPORATION.—Section 216(c)(2)(B)(i) 

24 is amended by striking ‘‘Federal banking agencies’’ 


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1 and inserting ‘‘Federal Deposit Insurance Corpora2 tion’’. 

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

4 WORTH REQUIREMENTS. 

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

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

7 (1) in paragraph (1)— 

8 (A) by striking ‘‘that are complex, as de9 fined by the Board’’; and 

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

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

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

13 following new paragraph: 

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

15 risk-based net worth requirement to take account of 

16 any material risks as defined by the Board applica17 ble to insured credit unions that are taken account 

18 of by comparable standards applicable to institutions 

19 insured by the Federal Deposit Insurance Corpora20 tion.’’. 

21 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

22 The heading for subsection (d) of section 216 of the Fed23 eral Credit Union Act (12 U.S.C. 1790d(d)) is amended 

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


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1 SEC. 103. TREATMENT BASED ON OTHER CRITERIA. 

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

3 (12 U.S.C. 1790d(h)(2)) is amended by inserting ‘‘, except 

4 to reclassify an insured credit union into the next lower 

5 net worth category, based on interest rate risk, to the ex6 tent any such reclassification by a delegatee may be re7 viewed by the Board,’’ after ‘‘to reclassify an insured cred8 it union into a lower net worth category’’. 

9 SEC. 104. DEFINITIONS RELATING TO NET WORTH. 

10 (a) SECONDARY CAPITAL ACCOUNTS FOR PURPOSES

11 OF DETERMINING NET WORTH.—Section 216(o)(2)(B) of 

12 the Federal Credit Union Act (12 U.S.C. 1790d(o)(2)(B)) 

13 is amended by inserting ‘‘, subject to limitations set by 

14 the Board to address the safe and sound use of secondary 

15 capital to carry out the purpose of this section,’’ after 

16 ‘‘secondary capital accounts’’. 

17 (b) NET WORTH RATIO.—Paragraph (3) of section 

18 216(o) of the Federal Credit Union Act (12 U.S.C. 

19 1790d(o)(3)) is amended— 

20 (1) by inserting ‘‘minus its deposit in the 

21 Fund,’’ after ‘‘net worth of the credit union’’; and 

22 (2) by inserting ‘‘minus its deposit in the 

23 Fund’’ after ‘‘total assets of the credit union’’. 

24 (c) RISK-BASED NET WORTH RATIO.—Section 

25 216(o) of the Federal Credit Union Act (12 U.S.C. 


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1 1790d)(o)) is amended by inserting after paragraph (4) 

2 the following new paragraph: 

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

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

5 to any credit union, the ratio of the net worth of the 

6 credit union, plus any loan loss reserves (subject to 

7 limitations established by the Board) and minus the 

8 credit union’s deposit in the Fund, to the risk assets 

9 of the credit union, as defined by the Board.’’. 

10 SEC. 105. AMENDMENTS RELATING TO NET WORTH RES11 TORATION PLANS. 

12 (a) TEMPORARY WAIVER OF NET WORTH RESTORA13 TION PLAN REQUIREMENT IN RESPONSE TO DISAS14 TERS.—Subsection 216(f)(1) of the Federal Credit Union 

15 Act (12 U.S.C. 1790d(f)(1)) is amended by striking ‘‘Each 

16 insured credit union’’ and inserting ‘‘Except as deter17 mined by the Board in the case of a credit union that 

18 becomes or remains no less than undercapitalized due to 

19 the impact of a major natural or man-made disaster, each 

20 insured credit union’’. 

21 (b) NET WORTH RESTORATION REQUIREMENT FOR

22 CREDIT UNIONS THAT ARE NOT WELL CAPITALIZED.— 

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

24 1790d(e) is amended to read as follows: 


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1 ‘‘(e) NET WORTH RESTORATION PLAN REQUIRE2 MENT APPLICABLE TO CREDIT UNIONS THAT ARE NOT

3 WELL CAPITALIZED.—The Board may require an insured 

4 credit union that is not well capitalized to submit a net 

5 worth restoration plan, as required under subsection (f), 

6 if— 

7 ‘‘(1) material safety and soundness concerns 

8 caused the credit union to become less than well cap9 italized; and 

10 ‘‘(2) the safety and soundness concerns remain 

11 unresolved.’’. 

12 (c) BOARD ACTION MAY INCLUDE ORDER TO CREDIT

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

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

15 amended— 

16 (1) by inserting ‘‘order the credit union to’’ be17 fore ‘‘take such other action’’; and 

18 (2) by inserting ‘‘, in the discretion of the 

19 Board,’’ after ‘‘as the Board’’. 

20 (d) SUBSTITUTION OF 90 CALENDAR DAYS.—Sub21 paragraph (A) of section 216(i)(3) of the Federal Credit 

22 Union Act (12 U.S.C. 1790d(i)(3)(A)) is amended— 

23 (1) by striking ‘‘calendar quarter’’ and insert24 ing ‘‘90 calendar days’’; 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 purpose 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); and 

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 SEC. 206. AMENDMENTS RELATING TO CREDIT UNION 

2 SERVICE TO UNDERSERVED AREAS. 

3 Paragraph (2) of section 109(c) of the Federal Credit 

4 Union Act (12 U.S.C. 1759(c)(2)) is amended— 

5 (1) in that portion of the paragraph that pre6 cedes subparagraph (A), by striking ‘‘the field of 

7 membership category of which is described in sub8 section (b)(2),’’; 

9 (2) by striking subparagraph (A) and inserting 

10 the following new subparagraph: 

11 ‘‘(A) the Board determines, at any time 

12 after August 7, 1998, that the local community, 

13 neighborhood, or rural district is an under14 served area; and’’; and 

15 (3) in subparagraph (B), by inserting ‘‘not later 

16 than 2 years of having an underserved area added 

17 to the credit union’s charter’’ before ‘‘the credit 

18 union’’. 

19 SEC. 207. UNDERSERVED AREA DEFINED. 

20 Section 101 of the Federal Credit Union Act (12 

21 U.S.C. 1752) is amended— 

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

23 (8); 

24 (2) by striking the period at the end of para25 graph (9) and inserting ‘‘; and’’; and 


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1 (3) by adding at the end the following new 

2 paragraph: 

3 ‘‘(10) the term ‘underserved area’ means a geo4 graphic area consisting of one or more population 

5 census tracts, that encompass or are located with6 in— 

7 ‘‘(A) an investment area designated under 

8 section 103(16) of the Community Development 

9 or Banking and Financial Institutions Act of 

10 1994; or 

11 ‘‘(B) a low income community, as defined 

12 in section 45D(e) of the Internal Revenue Code 

13 of 1986.’’. 

14 TITLE III—REGULATORY 

15 MODIFICATIONS 

16 SEC. 301. INVESTMENTS IN SECURITIES BY FEDERAL CRED17 IT UNIONS. 

18 Section 107 of the Federal Credit Union Act (12 

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

20 amended by inserting after subsection (a) the following 

21 new subsection: 

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

23 ACCOUNT.— 

24 ‘‘(1) IN GENERAL.—In addition to the invest25 ments authorized in subsection (a), a Federal credit 


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1 union may purchase and hold for its own account 

2 such investment securities of investment grade as 

3 the Board may authorize by regulation, subject to 

4 such limitations and restrictions as the Board may 

5 prescribe in the regulations. 

6 ‘‘(2) PERCENTAGE LIMITATIONS.— 

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

8 the total amount of investment securities of any 

9 single obligor or maker held by a Federal credit 

10 union for the credit union’s own account exceed 

11 at any time an amount equal to 10 percent of 

12 the net worth of the credit union. 

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

14 event may the aggregate amount of investment 

15 securities held by a Federal credit union for the 

16 credit union’s own account exceed at any time 

17 an amount equal to 10 percent of the assets of 

18 the credit union. 

19 ‘‘(3) INVESTMENT SECURITY DEFINED.— 

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

21 subsection, the term ‘investment security’ 

22 means marketable obligations evidencing the in23 debtedness of any person in the form of bonds, 

24 notes, or debentures and other instruments 

25 commonly referred to as investment securities. 


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1 ‘‘(B) FURTHER DEFINITION BY BOARD.— 

2 The Board may further define the term ‘invest3 ment security’. 

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

5 ‘investment grade’ means with respect to an invest6 ment security purchased by a credit union for its 

7 own account, an investment security that at the time 

8 of such purchase is rated in one of the 4 highest rat9 ing categories by at least 1 nationally recognized 

10 statistical rating organization. 

11 ‘‘(5) CLARIFICATION OF PROHIBITION ON

12 STOCK OWNERSHIP.—No provision of this subsection 

13 shall be construed as authorizing a Federal credit 

14 union to purchase shares of stock of any corporation 

15 for the credit union’s own account, except as other16 wise permitted by law.’’. 

17 SEC. 302. AUTHORITY OF NCUA TO ESTABLISH LONGER MA18 TURITIES FOR CERTAIN CREDIT UNION 

19 LOANS. 

20 Section 107(5) of the Federal Credit Union Act (12 

21 U.S.C. 1757(5)) is amended in the matter preceding sub22 paragraph (A), by striking ‘‘except as otherwise provided 

23 herein’’ and inserting ‘‘or any longer maturity as the 

24 Board may allow, in regulations’’. 


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1 SEC. 303. INCREASE IN LENDING AND INVESTMENT LIMITS 

2 IN CREDIT UNION SERVICE ORGANIZATIONS. 

3 (a) LENDING.—The 1st sentence of section 

4 107(5)(D) of the Federal Credit Union Act (12 U.S.C. 

5 1757(5)(D)) is amended— 

6 (1) by striking ‘‘up to 1 per centum of the total 

7 paid-in’’ and inserting ‘‘up to 2 percent of the total 

8 paid-in’’; and 

9 (2) by inserting ‘‘, except that the percentage 

10 limitation on any such loans by any credit union 

11 may be reduced by order of the Board when the 

12 Board determines such reduction is appropriate to 

13 preserve the safety and soundness of the credit 

14 union’’ before the period at the end. 

15 (b) INVESTING.—Section 107(7)(I) of the Federal 

16 Credit Union Act (12 U.S.C. 1757(7)(I)) is amended— 

17 (1) by striking ‘‘up to 1 per centum of the total 

18 paid’’ and inserting ‘‘up to 2 percent of the total 

19 paid’’; and 

20 (2) by inserting ‘‘, and such approval authority 

21 includes the authority to reduce the percentage limi22 tation on any such investment by any credit union 

23 if the Board determines such reduction is appro24 priate to preserve the safety and soundness of the 

25 credit union’’ after ‘‘with the approval of the 

26 Board’’. 


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1 SEC. 304. VOLUNTARY MERGERS INVOLVING MULTIPLE 

2 COMMON-BOND CREDIT UNIONS. 

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

4 (12 U.S.C. 1759(d)(2)) is amended by striking subpara5 graph (C) and inserting the following new subparagraph: 

6 ‘‘(C) any group transferred in connection 

7 with a voluntary merger of any such Federal 

8 credit union with another insured credit union, 

9 as approved by the Board on or after August 

10 7, 1998, in accordance with guidelines and reg11 ulations issued under section 120.’’. 

12 SEC. 305. CONVERSIONS OF CERTAIN CREDIT UNIONS TO A 

13 COMMUNITY CHARTER. 

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

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

16 (2) the following new paragraph: 

17 ‘‘(3) CRITERIA FOR CONTINUED MEMBERSHIP

18 OF CERTAIN MEMBER GROUPS IN COMMUNITY CHAR19 TER CONVERSIONS.—In the case of a voluntary con20 version of a credit union described in paragraph (1) 

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

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

23 prescribe, by regulation, the criteria under which the 

24 Board may determine that a member group or other 

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

26 is located outside the well-defined local community, 


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1 neighborhood, or rural district that shall constitute 

2 the community charter, can be satisfactorily served 

3 by the credit union and remain within the commu4 nity credit union’s field of membership permitting 

5 new members to be added from such groups.’’. 

6 SEC. 306. CREDIT UNION GOVERNANCE. 

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

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

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

10 ‘‘(b) POLICY AND ACTIONS OF BOARDS OF DIREC11 TORS OF FEDERAL CREDIT UNIONS.— 

12 ‘‘(1) EXPULSION OF MEMBERS FOR NON13 PARTICIPATION OR FOR JUST CAUSE.—The board of 

14 directors of a Federal credit union may, by majority 

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

16 policy with respect to expulsion from membership, 

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

18 on just cause, including disruption of credit union 

19 operations, or on nonparticipation by a member in 

20 the affairs of the credit union. 

21 ‘‘(2) WRITTEN NOTICE OF POLICY TO MEM22 BERS.—If a policy described in paragraph (1) is 

23 adopted, written notice of the policy as adopted and 

24 the effective date of such policy shall be provided 

25 to— 


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

2 union not less than 30 days prior to the effec3 tive date of such policy; and 

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

5 applying for membership.’’. 

6 (b) TERM LIMITS AUTHORIZED FOR BOARD MEM7 BERS OF FEDERAL CREDIT UNIONS.—Section 111(a) of 

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

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

10 ‘‘The bylaws of a Federal credit union may limit the num11 ber of consecutive terms any person may serve on the 

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

13 SEC. 307. PROVIDING THE NATIONAL CREDIT UNION AD14 MINISTRATION WITH GREATER FLEXIBILITY 

15 IN RESPONDING TO MARKET CONDITIONS. 

16 Section 107(5)(A)(vi)(I) of the Federal Credit Union 

17 Act (12 U.S.C. 1757(5)(A)(vi)(I)) is amended by striking 

18 ‘‘six-month period and that prevailing interest rate levels’’ 

19 and inserting ‘‘6-month period or that prevailing interest 

20 rate levels’’. 

21 SEC. 308. CREDIT UNION CONVERSION VOTING REQUIRE22 MENTS. 

23 Section 205(b)(2) of the Federal Credit Union Act 

24 (12 U.S.C. 1785(b)(2)(B)) is amended— 


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1 (1) by redesignating subparagraphs (E), (F), 

2 and (G) as subparagraphs (F), (G), and (H), respec3 tively; 

4 (2) by inserting after subparagraph (D) the fol5 lowing new subparagraph: 

6 ‘‘(E) CONVERSION VOTING REQUIRE7 MENTS.— 

8 ‘‘(i) IN GENERAL.—Approval of a pro9 posal for conversion in an election set by a 

10 majority of the directors of an insured 

11 credit union under subparagraph (B) shall 

12 be by the affirmative vote of a majority of 

13 the members of the insured credit union 

14 who vote on the proposal, in a vote in 

15 which at least 30 percent of the credit 

16 union membership participates. 

17 ‘‘(ii) SPECIAL MEMBERSHIP MEET18 ING.—An insured credit union which pro19 vides notices to its members under sub20 paragraph (C) of a proposed conversion 

21 shall— 

22 ‘‘(I) hold a special meeting of the 

23 membership to provide information re24 garding the proposal at least 30 days 


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1 before making any ballots available to 

2 its members; and 

3 ‘‘(II) include a notice of such 

4 meeting in the notices provided under 

5 subparagraph (C). 

6 ‘‘(iii) PROHIBITION ON INCENTIVES.— 

7 An insured credit union proposing to con8 vert under subparagraph (A)— 

9 ‘‘(I) is expressly prohibited from 

10 using or providing any incentive in 

11 any form of prize raffles, contests, 

12 giveaways, or other voting incentives 

13 in connection with the member vote 

14 on conversion; and 

15 ‘‘(II) may make no mention of 

16 any incentive in the notices to mem17 bers or in other materials it sends or 

18 otherwise communicates to members 

19 pursuant to subparagraph (C).’’; and 

20 (3) by striking the ultimate sentence of sub21 paragraph (B). 

22 SEC. 309. EXEMPTION FROM PRE-MERGER NOTIFICATION 

23 REQUIREMENT OF THE CLAYTON ACT. 

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

25 18a(c)(7)) is amended by inserting ‘‘section 205(b)(3) of 


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

2 before ‘‘or section 3’’. 

Æ 


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