Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Credit Union Member-
ship Access Act’’.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) The American credit union movement began
as a cooperative effort to serve the productive and
provident credit needs of individuals of modest
means.
(2) Credit unions continue to fulfill this public
purpose, and current members and membership
groups should not face divestiture from the financial
services institution of their choice as a result of re-
cent court action.
(3) To promote thrift and credit extension, a
meaningful affinity and bond among members,
manifested by a commonality of routine interaction,
shared and related work experiences, interests, or
activities, or the maintenance of an otherwise well-
understood sense of cohesion or identity is essential
to the fulfillment of credit unions’ public mission.
(4) Credit unions, unlike many other partici-
pants in the financial services market, are exempt
from Federal and most State taxes because they are
member-owned, democratically operated, not-for-
profit organizations generally managed by volunteer
boards of directors and because they have the speci-
fied mission of meeting the credit and savings needs
of consumers, especially persons of modest means.
(5) Improved credit union safety and soundness
provisions will enhance the public benefit that citi-
zens receive from these cooperative financial services
institutions.
TITLE I—CREDIT UNION
MEMBERSHIP
SEC. 101. FIELDS OF MEMBERSHIP.
Section 109 of the Federal Credit Union Act (12
U.S.C. 1759) is amended—
(1) in the first sentence—
(A) by striking ‘‘Federal credit union
membership shall consist of’’ and inserting ‘‘(a)
IN GENERAL.—Subject to subsection (b), Fed-
eral credit union membership shall consist of’’;
and
(B) by striking ‘‘, except that’’ and all that
follows through the period at the end of such
sentence and inserting a period; and
(2) by adding at the end the following new sub-
sections:
‘‘(b) MEMBERSHIP FIELD.—Subject to the other pro-
visions of this section, the membership of any Federal
credit union shall be limited to the membership described
in 1 of the following categories:
‘‘(1) SINGLE COMMON-BOND CREDIT UNION.—
1 group which has a common bond of occupation or
association.
‘‘(2) 
MULTIPLE
COMMON-BOND
CREDIT
UNION.—More than 1 group—
‘‘(A) each of which has (within such
group) a common bond of occupation or asso-
ciation; and
‘‘(B) the number of members of each of
which (at the time the group is first included
within the field of membership of a credit union
described in this paragraph) does not exceed
any numerical limitation applicable under sub-
section (d).
‘‘(3) COMMUNITY CREDIT UNION.—Persons or
organizations within a well-defined local community,
neighborhood, or rural district.
‘‘(c) GRANDFATHERED MEMBERS AND GROUPS.—
‘‘(1) IN GENERAL.—Notwithstanding subsection
(b)—
‘‘(A) any person or organization who is a
member of any Federal credit union as of the
date of the enactment of the Credit Union
Membership Access Act may remain a member
of such credit union after such date; and
‘‘(B) a member of any group whose mem-
bers constituted a portion of the membership of
any Federal credit union as of such date of en-
actment shall continue to be eligible to become
a member of such credit union, by virtue of
membership in such group, after such date.
‘‘(2) SUCCESSORS.—If the common bond of any
group referred to in paragraph (1) is defined by any
particular organization or business entity, paragraph
(1) shall continue to apply with respect to any suc-
cessor to such organization or entity.
‘‘(d) MULTIPLE
COMMON-BOND
CREDIT
UNION
GROUP REQUIREMENTS.—
‘‘(1) NUMERICAL LIMITATION.—Except as pro-
vided in paragraph (2), only a group with fewer than
3,000 members shall be eligible to be included in the
field of membership of a credit union described in
subsection (b)(2).
‘‘(2) EXCEPTIONS.—In the case of any Federal
credit union whose field of membership is deter-
mined under subsection (b)(2), the numerical limita-
tion described in paragraph (1) shall not apply with
respect to the following:
‘‘(A) CERTAIN
LARGER
GROUPS
INCAPA-
BLE OF SUPPORTING AND OPERATING A SIN-
GLE-GROUP CREDIT UNION.—Any group which
the Board determines, in writing and in accord-
ance with the guidelines and regulations de-
scribed in paragraph (4), could not feasibly or
reasonably establish a new single common-bond
credit union described in subsection (b)(1) be-
cause—
‘‘(i) the group lacks sufficient volun-
teer and other resources to support the ef-
ficient and effective operation of a credit
union;
‘‘(ii) the group does not meet the cri-
teria which the Board has determined to
be important for the likelihood of success
in establishing and managing a new credit
union, including demographic characteris-
tics, such as geographical location of mem-
bers, diversity of ages and income levels,
and other factors which may affect the fi-
nancial viability and stability of a credit
union; or
‘‘(iii) the group would be unlikely to
operate a safe and sound credit union.
‘‘(B) TRANSACTIONS
FOR
SUPERVISORY
REASONS.—Any group transferred from another
credit union—
‘‘(i) in connection with a merger or
consolidation which has been recommended
by the Board or any appropriate State
credit union supervisor for safety and
soundness concerns with respect to such
other credit union; or
‘‘(ii) by the Board in the Board’s ca-
pacity as conservator or liquidating agent
with respect to such other credit union.
‘‘(3) EXCEPTION FOR UNDERSERVED AREAS.—
Notwithstanding subsection (b), in the case of a
Federal credit union described in paragraph (2) of
such subsection, the Board may allow the member-
ship of the credit union to include any person or or-
ganization within a local community, neighborhood,
or rural district if—
‘‘(A) the Board determines that such local
community, neighborhood, or rural district—
‘‘(i) meets the requirements of para-
graph (3) and subparagraphs (A) and (B)
of paragraph (4) of section 233(b) of the
Bank Enterprise Act of 1991, and such
additional requirements as the Board may
impose; and
‘‘(ii) is underserved, based on data of
the Board and the Federal banking agen-
cies (as defined in section 3 of the Federal
Deposit Insurance Act), by other deposi-
tory institutions (as defined in section
19(b)(1)(A) of the Federal Reserve Act);
and
‘‘(B) the credit union establishes and
maintains an office or facility in such local com-
munity, neighborhood, or rural district at which
credit union services are available.
‘‘(4) REGULATIONS
AND
GUIDELINES.—The
Board shall issue guidelines or regulations, after no-
tice and opportunity for comment, setting forth the
criteria the Board will apply in determining whether
or not an additional group may be included within
the field of membership of an existing credit union
pursuant to paragraph (2).
‘‘(e) ADDITIONAL MEMBERSHIP ELIGIBILITY PROVI-
SIONS.—
‘‘(1) MEMBERSHIP ELIGIBILITY LIMITED TO IM-
MEDIATE FAMILY OR HOUSEHOLD MEMBERS.—No
individual shall be eligible for membership in a cred-
it union on the basis of the relationship of such indi-
vidual to another person who is eligible for member-
ship in such credit union unless the individual is a
member of the immediate family or household (as
such terms are defined by the Board by regulation)
of such other person.
‘‘(2) RETENTION OF MEMBERSHIP.—Except as
provided in section 118, once a person becomes a
member of a credit union in accordance with this
title, such person or organization may remain a
member of such credit union until the person or or-
ganization chooses to withdraw from the member-
ship of the credit union.’’.
SEC. 102. CRITERIA FOR APPROVAL OF EXPANSION OF
MEMBERSHIP OF MULTIPLE COMMON-BOND
CREDIT UNIONS.
Section 109 of the Federal Credit Union Act (12
U.S.C. 1759) is amended by inserting after subsection (e)
(as added by section 101 of this title) the following new
subsection:
‘‘(f) CRITERIA FOR APPROVAL OF EXPANSION OF
MULTIPLE COMMON-BOND CREDIT UNIONS.—
‘‘(1) IN GENERAL.—The Board shall—
‘‘(A) encourage the formation of separately
chartered credit unions instead of approving an
application to include an additional group with-
in the field of membership of an existing credit
union whenever practicable and consistent with
reasonable standards for the safe and sound op-
eration of the credit union; and
‘‘(B) if the formation of a separate credit
union by such group is not practicable or con-
sistent with such standards, require the inclu-
sion of such group in the field of membership
of a credit union which is within reasonable
proximity to the location of the group whenever
practicable and consistent with reasonable
standards for the safe and sound operation of
the credit union.
‘‘(2) APPROVAL
CRITERIA.—The Board may
not approve any application by a Federal credit
union described in subsection (b)(2) to include any
additional group within the field of membership of
such credit union (or an application by a Federal
credit union described in paragraph (1) to include
an additional group and become a credit union de-
scribed in paragraph (2)) unless the Board deter-
mines, in writing, that—
‘‘(A) such credit union has not engaged in
any unsafe or unsound practice (as defined in
section 206(b)) which is material during the 1-
year period preceding the filing of the applica-
tion;
‘‘(B) the credit union is adequately capital-
ized;
‘‘(C) the credit union has the administra-
tive capability to serve the proposed member-
ship group and the financial resources to meet
the need for additional staff and assets to serve
the new membership group;
‘‘(D) pursuant to the most recent evalua-
tion of such credit union under section 215, the
credit union is satisfactorily providing afford-
able credit union services to all individuals of
modest means within the field of membership of
such credit union;
‘‘(E) any potential harm the expansion of
the field of membership of the credit union may
have on any other insured credit union and its
members is clearly outweighed in the public in-
terest by the probable beneficial effect of the
expansion in meeting the convenience and needs
of the members of the group proposed to be in-
cluded in the field of membership; and
‘‘(F) the credit union has met such addi-
tional requirements as the Board may prescribe
in regulations.’’.
SEC. 103. GEOGRAPHICAL GUIDELINES FOR COMMUNITY
CREDIT UNIONS.
Section 109 of the Federal Credit Union Act (12
U.S.C. 1759) is amended by inserting after subsection (f)
(as added by section 102 of this title) the following new
subsection:
‘‘(g) REGULATIONS
REQUIRED
FOR
COMMUNITY
CREDIT UNIONS.—
‘‘(1) DEFINITION
OF
WELL-DEFINED
LOCAL
COMMUNITY, 
NEIGHBORHOOD, 
OR
RURAL
DIS-
TRICT.—The Board shall prescribe regulations defin-
ing the term ‘well-defined local community, neigh-
borhood, or rural district’ for purposes of—
‘‘(A) making any determination with re-
gard to the field of membership of a credit
union described in subsection (b)(3); and
‘‘(B) establishing the criteria applicable
with respect to any such determination.
‘‘(2) SCOPE OF APPLICATION.—Paragraph (1)
shall apply with respect to any application to form
a new credit union, or to alter or expand the field
of membership of an existing credit union, which is
filed with the Board after the date of the enactment
of Credit Union Membership Access Act.’’.
TITLE II—REGULATION OF
CREDIT UNIONS
SEC. 201. FINANCIAL STATEMENT AND AUDIT REQUIRE-
MENTS.
(a) IN GENERAL.—Section 202(a)(6) of the Federal
Credit Union Act (12 U.S.C. 1782(a)(6)) is amended by
adding at the end the following new subparagraphs:
‘‘(C) ACCOUNTING PRINCIPLES.—
‘‘(i) IN GENERAL.—Accounting prin-
ciples applicable to reports or statements
required to be filed with the Board by each
insured credit union shall be uniform and
consistent with generally accepted account-
ing principles.
‘‘(ii) BOARD DETERMINATION.—If the
Board determines that the application of
any generally accepted accounting principle
to any insured credit union is not appro-
priate, the Board may prescribe an ac-
counting principle for application to such
credit unions which is no less stringent
than generally accepted accounting prin-
ciples.
‘‘(iii) DE MINIMUS EXCEPTION.—This
subparagraph shall not apply to any in-
sured credit union the total assets of which
are less than $10,000,000 unless pre-
scribed by the Board or an appropriate
State credit union supervisor.
‘‘(D) LARGE
CREDIT
UNION
AUDIT
RE-
QUIREMENT.—Each insured credit union which
has total assets of $500,000,000 or more shall
have an annual independent audit of the finan-
cial statement of the credit union performed in
accordance with generally accepted auditing
standards by an independent certified public ac-
countant or public accountant licensed by the
appropriate State or jurisdiction to perform
such services.’’.
(b) TECHNICAL AND CONFORMING AMENDMENT.—
Section 202(a)(6)(B) of the Federal Credit Union Act (12
1786(b)(6)(B)) is amended by striking ‘‘subparagraph
(A)’’ and inserting ‘‘subparagraph (A) or (D)’’.
SEC. 202. CONVERSIONS OF CREDIT UNIONS INTO OTHER
DEPOSITORY INSTITUTIONS.
(a) REVIEW OF REGULATIONS REQUIRED.—The Na-
tional Credit Union Administration Board shall conduct
a detailed review of all regulations which govern or affect
the conversion of a credit union into any other form of
depository institution, including regulations relating to the
form of disclosure required preceding a vote by the mem-
bers of a credit union with regard to any such conversion
and the manner in which such vote shall be conducted,
to ensure that such regulations freely and fairly permit
any such conversion after free, fair, and objective disclo-
sure to the members of the credit union of the facts and
issues involved in any such conversion.
(b) REPORT TO THE CONGRESS.—
(1) IN GENERAL.—Before the end of the 12-
month period beginning on the date of the enact-
ment of this Act, the National Credit Union Admin-
istration Board shall submit a detailed report on the
findings and conclusions of the Board in connection
with the review required under subsection (a).
(2) CONTENTS OF REPORT.—The report sub-
mitted pursuant to paragraph (1) shall contain—
(A) any recommendation for any adminis-
trative or legislative change which the Board
may determine to be appropriate with regard to
any aspect of the conversion of a credit union
into another form of depository institution; and
(B) the justification for any recommenda-
tion of the Board—
(i) to retain in effect any provision of
the regulations in effect on March 13,
1998, which govern or affect the conver-
sion of a credit union into any other form
of depository institution; or
(ii) to amend or alter any such provi-
sion.
(c) DEFINITIONS.—For purposes of this section, the
following definitions shall apply:
(1) CREDIT UNION.—The term ‘‘credit union’’
means any Federal credit union or State credit
union (as such terms are defined in paragraphs (1)
and (6), respectively, of section 101 of the Federal
Credit Union Act).
(2) DEPOSITORY INSTITUTION.—The term ‘‘de-
pository institution’’ has the meaning given such
term in section 3 of the Federal Deposit Insurance
Act.
SEC. 203. FREEZE ON BOARD REGULATIONS RELATING TO
COMMERCIAL 
LOANS 
AND 
CERTAIN 
AP-
PRAISAL 
REQUIREMENTS 
RELATING 
TO
SUCH LOANS.
(a) IN GENERAL.—The regulations of the National
Credit Union Administration Board which are codified in
parts 701.21(h) and 722.3(a) of the Code of Federal Reg-
ulations, as in effect on March 13, 1998 (relating to busi-
ness loans and lines of credit to members and appraisal
requirements), including any other regulations which are
applicable with respect to loans or lines of credit to which
the part applies, shall remain in effect without amendment
or altered application until the end of the 1-year period
beginning on such date and, notwithstanding the Federal
Credit Union Act or any other provision of law, any action
of the National Credit Union Administration Board, or the
National Credit Union Administration, on or after such
date which purports to amend (including an amendment
by substitution) or otherwise apply any such regulation
differently than in effect on such date shall have no force
or legal effect before the end of such 1-year period.
(b) REVIEW AND REPORT TO THE CONGRESS.—Be-
fore the end of the 1-year period described in subsection
(a), the National Credit Union Administration Board shall
conduct a review of the effectiveness of the regulations re-
ferred to in such subsection as in effect on March 13,
1998, and shall submit a report to the Congress on the
results of such review before the end of such 1-year period.
SEC. 204. SERVING PERSONS OF MODEST MEANS WITHIN
THE FIELD OF MEMBERSHIP OF CREDIT
UNIONS.
(a) IN GENERAL.—Title II of the Federal Credit
Union Act (12 U.S.C. 1781 et seq.) is amended by adding
at the end the following new section:
‘‘SEC. 215. SERVING PERSONS OF MODEST MEANS WITHIN
THE FIELD OF MEMBERSHIP OF CREDIT
UNIONS.
‘‘(a) CONTINUING AND AFFIRMATIVE OBLIGATION.—
The purpose of this section is to reaffirm that insured
credit unions have a continuing and affirmative obligation
to meet the financial services needs of persons of modest
means consistent with safe and sound operation.
‘‘(b) EVALUATION
BY
THE BOARD.—The Board
shall, before the end of the 12-month period beginning on
the date of the enactment of the Credit Union Membership
Access Act—
‘‘(1) prescribe criteria for periodically reviewing
the record of each insured credit union in providing
affordable credit union services to all individuals of
modest means (including low- and moderate-income
individuals) within the field of membership of such
credit union; and
‘‘(2) provide for making the results of such re-
view publicly available.
‘‘(c) ADDITIONAL CRITERIA FOR COMMUNITY CRED-
IT UNIONS REQUIRED.—The Board shall, by regulation—
‘‘(1) prescribe additional criteria for annually
evaluating the record of any insured credit union
which is organized to serve a well-defined local com-
munity, neighborhood, or rural district in meeting
the credit needs and credit union service needs of
the entire field of membership of such credit union;
and
‘‘(2) prescribe procedures for remedying the
failure of any insured credit union described in para-
graph (1) to meet the criteria established pursuant
to such paragraph, including the disapproval of any
application by such credit union to expand the field
of membership of such credit union.
‘‘(d) EMPHASIS
ON PERFORMANCE, NOT PAPER-
WORK.—In evaluating any insured credit union under this
section, the Board shall—
‘‘(1) focus on the actual performance of the in-
sured credit union; and
‘‘(2) not impose burdensome paperwork or rec-
ordkeeping requirements.’’.
(b) ANNUAL REPORTS.—With respect to each of the
1st 5 years which begin after the date of the enactment
of this Act, the National Credit Union Administration
Board shall include in the annual report to the Congress
under section 102(d) of the Federal Credit Union Act a
report on the progress of the Board in implementing sec-
tion 215 of such Act (as added by subsection (a) of this
section).
SEC. 205. NATIONAL CREDIT UNION ADMINISTRATION
BOARD MEMBERSHIP.
Section 102(b) of the Federal Credit Union Act (12
1752a(b)) is amended—
(1) by striking ‘‘(b) The Board’’ and inserting
‘‘(b) 
MEMBERSHIP
AND
APPOINTMENT
OF
BOARD.—
‘‘(1) IN GENERAL.—The Board’’; and
(2) by adding at the end the following new
paragraph:
‘‘(2) APPOINTMENT CRITERIA.—
‘‘(A) EXPERIENCE
IN
FINANCIAL
SERV-
ICES.—In considering appointments to the
Board under paragraph (1), the President shall
give consideration to individuals who, by virtue
of their education, training, or experience relat-
ing to a broad range of financial services, finan-
cial services regulation, or financial policy, are
especially qualified to serve on the Board.
‘‘(B) LIMIT ON APPOINTMENT OF CREDIT
UNION OFFICERS.—Not more than 1 member of
the Board may be appointed to the Board from
among individuals who, at the time of such ap-
pointment, are, or have recently been, involved
with any insured credit union as a committee
member, director, officer, employee, or other in-
stitution-affiliated party.’’.
SEC. 206. REPORT AND CONGRESSIONAL REVIEW REQUIRE-
MENT FOR CERTAIN REGULATIONS.
Any regulation prescribed by the National Credit
Union Administration Board defining, or amending the
definition of—
(1) the term ‘‘immediate family or household’’
for purposes of subsection (e)(1) of section 109 of
the Federal Credit Union Act (as added by section
101 of this Act); or
(2) the term ‘‘well-defined local community,
neighborhood, or rural district’’ for purposes of sub-
section (g) of such section (as added by section 103
of this Act),
shall be treated as a major rule for purposes of chapter
8 of title 5, United States Code.
TITLE III—CAPITALIZATION AND
NET WORTH OF CREDIT UNIONS
SEC. 301. PROMPT CORRECTIVE ACTION.
(a) IN GENERAL.—Title II of the Federal Credit
Union Act (12 U.S.C. 1781 et seq.) is amended by insert-
ing after section 215 (as added by section 204 of this Act)
the following new section:
‘‘SEC. 216. PROMPT CORRECTIVE ACTION
‘‘(a) RESOLVING PROBLEMS TO PROTECT FUND.—
‘‘(1) PURPOSE.—The purpose of this section is
to resolve the problems of insured credit unions at
the least possible long-term loss to the National
Credit Union Share Insurance Fund.
‘‘(2) 
PROMPT
CORRECTIVE
ACTION
RE-
QUIRED.—The Board shall carry out the purpose of
this section by taking prompt corrective action to re-
solve the problems of insured credit unions.
‘‘(b) REGULATIONS.—The Board shall implement
subsection (a) of this section by prescribing regulations,
after public notice and opportunity for comment, which—
‘‘(1) establish criteria and procedures for
classifying credit unions as ‘well capitalized’, ‘ade-
quately capitalized’, ‘undercapitalized’, ‘significantly
undercapitalized’, or ‘critically undercapitalized’;
‘‘(2) specify a series of graduated regulatory en-
forcement actions that may be imposed upon any
credit union which fails to meet the requirements for
classification as an adequately capitalized credit
union, including—
‘‘(A) the submission of net worth restora-
tion plans;
‘‘(B) earnings retention requirements;
‘‘(C) prior written approval by the Board
for certain activities such as branching and
entry into new lines of business; and
‘‘(D) the appointment of a conservator or
liquidating agent in appropriate circumstances;
‘‘(3) establish reasonable net worth require-
ments, including risk-based net worth requirements
in the case of complex credit unions, for various cat-
egories of credit unions and prescribe the manner in
which net worth is calculated (for purposes of such
requirements) with regard to various types of invest-
ments, including investments in corporate credit
unions, taking into account the unique nature and
role of credit unions;
‘‘(4) establish criteria for reclassifying the cap-
ital classifications of credit unions that engage in
unsafe or unsound practices; and
‘‘(5) are generally comparable with the prompt
corrective action provisions set forth in section 38 of
the Federal Deposit Insurance Act, taking into ac-
count the distinct capital structure, cooperative na-
ture, and other characteristics of credit unions.’’.
(b) EFFECTIVE DATE OF REGULATIONS.—
(1) PROPOSED
REGULATIONS.—The National
Credit Union Administration Board shall publish, in
the Federal Register, proposed regulations which
meet the requirements of the amendment made by
subsection (a) before the end of the 270-day period
beginning on the date of the enactment of this Act.
(2) FINAL REGULATIONS.—The regulations re-
quired by the amendment made by subsection (a)
shall take effect in final form by the end of the 18-
month period beginning on the date of the enact-
ment of this Act.
(c) REPORT TO CONGRESS.—At the time the pro-
posed prompt corrective action regulations are published
in the Federal Register by the National Credit Union Ad-
ministration Board pursuant to subsection (b)(1), the
Board shall submit a report to the Congress on the dif-
ferences and similarities between such prompt corrective
action regulations and the regulations prescribed by the
Federal bank agencies under section 38 of the Federal De-
posit Insurance Act.
SEC. 302. NATIONAL CREDIT UNION SHARE INSURANCE
FUND EQUITY RATIO, AVAILABLE ASSETS
RATIO, AND STANDBY PREMIUM CHARGE.
(a) IN GENERAL.—Section 202 of the Federal Credit
Union Act (12 U.S.C. 1782) is amended—
(1) by amending subsection (b) to read as fol-
lows:
‘‘(b) CERTIFIED STATEMENT.—
‘‘(1) STATEMENT REQUIRED.—
‘‘(A) IN
GENERAL.—For each calendar
year in the case of an insured credit union with
total assets of not more than $50,000,000, and
for each semi-annual period in the case of an
insured credit union with total assets of
$50,000,000 or more, an insured credit union
shall file with the Board, at such time as the
Board prescribes, a certified statement showing
the total amount of insured shares in the credit
union at the close of the relevant period and
both the amount of its deposit or adjustment of
deposit and the amount of the insurance charge
due to the fund for that period, both as com-
puted under subsection (c).
‘‘(B) EXCEPTION
FOR
NEWLY
INSURED
CREDIT
UNION.—Subparagraph (A) shall not
apply with respect to a credit union that be-
came insured during the reporting period.
‘‘(2) FORM.—The certified statements required
to be filed with the Board pursuant to this sub-
section shall be in such form and shall set forth such
supporting information as the Board shall require.
‘‘(3) CERTIFICATION.—The president of the
credit union or any officer designated by the board
of directors shall certify, with respect to each such
statement, that to the best of his or her knowledge
and belief the statement is true, correct, complete,
and in accordance with this title and the regulations
issued under this title.’’;
(2) by amending clause (iii) of subsection
(c)(1)(A) to read as follows:
‘‘(iii) PERIODIC
ADJUSTMENT.—The
amount of each insured credit union’s de-
posit shall be adjusted as follows, in ac-
cordance with procedures determined by
the Board, to reflect changes in the credit
union’s insured shares:
‘‘(I) annually, in the case of an
insured credit union with total assets
of not more than $50,000,000; and
‘‘(II) semi-annually, in the case
of an insured credit union with total
assets of $50,000,000 or more.’’;
(3) by amending paragraphs (2) and (3) of sub-
section (c) to read as follows:
‘‘(2) INSURANCE PREMIUM CHARGES.—
‘‘(A) IN
GENERAL.—Each insured credit
union shall, at such times as the Board pre-
scribes (but not more than twice in any cal-
endar year), pay to the fund a premium charge
for insurance in an amount stated as a percent-
age of insured shares (which shall be the same
for all insured credit unions).
‘‘(B) RELATION OF PREMIUM CHARGE TO
EQUITY RATIO OF FUND.—The Board may as-
sess a premium charge only if—
‘‘(i) the fund’s equity ratio is less
than 1.3 percent; and
‘‘(ii) the premium charge does not ex-
ceed the amount necessary to restore the
equity ratio to 1.3 percent.
‘‘(C) PREMIUM CHARGE REQUIRED IF EQ-
UITY
RATIO
FALLS
BELOW
1.2
PERCENT.—If
the fund’s equity ratio is less than 1.2 percent,
the Board shall, subject to subparagraph (B),
assess a premium charge in such an amount as
the Board determines to be necessary to restore
the equity ratio to, and maintain that ratio at,
1.2 percent.
‘‘(3) DISTRIBUTIONS FROM FUND REQUIRED.—
‘‘(A) IN GENERAL.—The Board shall effect
a pro rata distribution to insured credit unions
after each calendar year if, as of the end of that
calendar year—
‘‘(i) any loans to the fund from the
Federal Government, and any interest on
those loans, have been repaid;
‘‘(ii) the fund’s equity ratio exceeds
the normal operating level; and
‘‘(iii) the fund’s available assets ratio
exceeds 1.0 percent.
‘‘(B) AMOUNT
OF
DISTRIBUTION.—The
Board shall distribute under subparagraph (A)
the maximum possible amount that—
‘‘(i) does not reduce the fund’s equity
ratio below the normal operating level; and
‘‘(ii) does not reduce the fund’s avail-
able assets ratio below 1.0 percent.
‘‘(C) CALCULATION BASED ON CERTIFIED
STATEMENTS.—In calculating the fund’s equity
ratio and available assets ratio for purposes of
this paragraph, the Board shall determine the
aggregate amount of the insured shares in all
insured credit unions from insured credit
unions certified statements under subsection (b)
for the final reporting period of the calendar
year referred to in subparagraph (A).’’;
(4) by adding at the end of subsection (c) the
following new paragraph:
‘‘(4) TIMELINESS AND ACCURACY OF DATA.—In
calculating the available assets ratio and equity ratio
of the fund, the Board shall use the most current
and accurate data reasonably available.’’; and
(5) by amending subsection (h) to read as fol-
lows:
‘‘(h) DEFINITIONS.—For purposes of this section, the
following definitions shall apply:
‘‘(1) AVAILABLE
ASSETS
RATIO.—The term
‘available assets ratio’, when applied to the fund,
means the ratio of—
‘‘(A) the amount determined by subtract-
ing—
‘‘(i) direct liabilities of the fund and
contingent liabilities for which no provision
for losses has been made, from
‘‘(ii) the sum of cash and the market
value of unencumbered investments au-
thorized under section 203(c), to
‘‘(B) the aggregate amount of the insured
shares in all insured credit unions.
‘‘(2) EQUITY RATIO.—The term ‘equity ratio’,
when applied to the fund, means the ratio of—
‘‘(A) the amount of fund capitalization, in-
cluding insured credit unions’ 1 percent capital-
ization deposits and the fund’s retained earn-
ings balance (net of direct liabilities of the fund
and contingent liabilities for which no provision
for losses has been made), to
‘‘(B) the aggregate amount of the insured
shares in all insured credit unions.
‘‘(3) INSURED
SHARES.—The term ‘insured
shares’, when applied to this section, includes share,
share draft, share certificate, and other similar ac-
counts as determined by the Board, but does not in-
clude amounts exceeding the insured account limit
set forth in section 207(c)(1).
‘‘(4) NORMAL OPERATING LEVEL.—The term ‘normal
operating level’, when applied to the fund, means an equity
ratio specified by the Board, which shall be not less than
1.2 percent and not more than 1.5 percent.’’.
(b) EFFECTIVE DATE.—This section shall become ef-
fective on January 1 of the first calendar year beginning
more than 180 days after the date of enactment of this
Act.
SEC. 303. ACCESS TO LIQUIDITY.
Section 204 of the Federal Credit Union Act (12
U.S.C. 1784) is amended by adding at the end the follow-
ing new subsections:
‘‘(f) ACCESS TO LIQUIDITY.—The Board shall—
‘‘(1) periodically assess the potential liquidity
needs of each insured credit union, and the options
that the credit union has available for meeting those
needs; and
‘‘(2) periodically assess the potential liquidity
needs of insured credit unions as a group, and the
options that insured credit unions have available for
meeting those needs.
‘‘(g) SHARING INFORMATION WITH FEDERAL RE-
SERVE BANKS.—The Board shall, for the purpose of fa-
cilitating insured credit unions’ access to liquidity, make
available to the Federal reserve banks (subject to appro-
priate assurances of confidentiality) information relevant
to making advances to such credit unions, including the
Board’s reports of examination.’’.
TITLE IV—MISCELLANEOUS
PROVISIONS
SEC. 401. ASSURING INDEPENDENT DECISION MAKING IN
CONNECTION WITH CERTAIN CONVERSIONS.
Section 18 of the Federal Deposit Insurance Act (12
U.S.C. 1828) is amended by adding at the end the follow-
ing new subsection:
‘‘(t) CONVERSIONS
INVOLVING
FORMER
CREDIT
UNIONS.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of law—
‘‘(A) an insured credit union may not con-
vert into an insured depository institution; and
‘‘(B) an insured depository institution
which resulted from a prior conversion of an in-
sured credit union into such insured depository
institution may not convert from the mutual
form to the stock form and may not convert
from 1 form of depository institution into an-
other,
unless the appropriate Federal banking agency for
the insured depository institution which results from
any such conversion reviews the conversion and de-
termines that the requirements of paragraphs (2)
and (3) have been met.
‘‘(2) PROHIBITION
ON
ECONOMIC
BENEFIT
FROM CONVERSION FOR CREDIT UNION OFFICERS,
DIRECTORS, AND COMMITTEE MEMBERS.—An indi-
vidual who is or, at any time during the 5-year pe-
riod preceding any conversion described in para-
graph (1), was a director, committee member, or
senior management official of an insured credit
union described in subparagraph (A) or (B) of such
paragraph (in connection with such conversion) may
not receive any economic benefit as a result of the
conversion with regard to the shares or interests of
such director, member, or officer in the former in-
sured credit union or in any resulting insured depos-
itory institution.
‘‘(3) ACKNOWLEDGEMENT
AND
ATTESTATION
BY OFFICERS, DIRECTORS, AND COMMITTEE MEM-
BERS.—Any insured credit union or insured deposi-
tory institution which is seeking to engage in a con-
version which is subject to this subsection shall sub-
mit—
‘‘(A) a written acknowledgement, in such
form and manner as the appropriate Federal
banking agency may prescribe, by every individ-
ual who is subject to the prohibition contained
in paragraph (2), that such individual is aware
of such prohibition; and
‘‘(B) an attestation that the conversion
under review will not result in a violation of
such prohibition.
‘‘(4) DEFINITIONS.—For purposes of this sub-
section, the following definitions shall apply:
‘‘(A) INSURED CREDIT UNION.—The term
‘insured credit union’ has the meaning given to
such term in section 101(7) of the Federal
Credit Union Act.
‘‘(B) SENIOR
MANAGEMENT
OFFICIAL.—
The term ‘senior management official’ means a
chief executive officer, an assistant chief execu-
tive officer, a chief financial officer, and any
other senior executive officer (as defined by the
appropriate Federal banking agency pursuant
to section 32(f)).’’.
Passed the House of Representatives April 1, 1998.
Attest:
Clerk.