I 
110TH CONGRESS 
2D SESSION 
H. R. 5519 
To advance credit union efforts to promote economic growth, modify credit 
union regulatory standards and reduce burdens, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 3, 2008 
Mr. KANJORSKI (for himself and Mr. ROYCE) introduced the following bill; 
which was referred to the Committee on Financial Services 
A BILL 
To advance credit union efforts to promote economic growth, 
modify credit union regulatory standards and reduce bur-
dens, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Credit Union Regulatory Relief Act of 2008’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Investments in securities by Federal credit unions. 
Sec. 3. Increase in investment limit in credit union service organizations. 
Sec. 4. Member business loan exclusion for loans to nonprofit religious organi-
zations. 
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Sec. 5. Authority of NCUA to establish longer maturities for certain credit 
union loans. 
Sec. 6. Providing the National Credit Union Administration with greater flexi-
bility in responding to market conditions. 
Sec. 7. Conversions of certain credit unions to a community charter. 
Sec. 8. Credit union participation in the SBA section 504 program. 
Sec. 9. Amendments relating to credit union service to underserved areas. 
Sec. 10. Short-term payday loan alternatives within field of membership. 
Sec. 11. Credit union governance. 
Sec. 12. Encouraging small business development in underserved urban and 
rural communities. 
Sec. 13. Exemption from pre-merger notification requirement of the Clayton 
Act. 
SEC. 2. INVESTMENTS IN SECURITIES BY FEDERAL CREDIT 
UNIONS. 
Section 107 of the Federal Credit Union Act (12 
U.S.C. 1757) is amended— 
(1) by striking ‘‘A Federal credit union’’ and 
inserting ‘‘(a) IN
GENERAL.—A Federal credit 
union’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(b) INVESTMENT FOR THE CREDIT UNION’S OWN 
ACCOUNT.— 
‘‘(1) IN GENERAL.—In addition to the invest-
ments authorized in subsection (a), a Federal credit 
union may purchase and hold for its own account 
such investment securities of investment grade as 
the Board may authorize by regulation, subject to 
such limitations and restrictions as the Board may 
prescribe in the regulations. 
‘‘(2) PERCENTAGE LIMITATIONS.— 
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‘‘(A) SINGLE OBLIGOR.—In no event may 
the total amount of investment securities of any 
single obligor or maker held by a Federal credit 
union for the credit union’s own account exceed 
at any time an amount equal to 10 percent of 
the net worth of the credit union. 
‘‘(B) AGGREGATE
INVESTMENTS.—In no 
event may the aggregate amount of investment 
securities held by a Federal credit union for the 
credit union’s own account exceed at any time 
an amount equal to 10 percent of the assets of 
the credit union. 
‘‘(3) INVESTMENT SECURITY DEFINED.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, the term ‘investment security’ 
means marketable obligations evidencing the in-
debtedness of any person in the form of bonds, 
notes, or debentures and other instruments 
commonly referred to as investment securities. 
‘‘(B) FURTHER DEFINITION BY BOARD.— 
The Board may further define the term ‘invest-
ment security’. 
‘‘(4) INVESTMENT GRADE DEFINED.—The term 
‘investment grade’ means with respect to an invest-
ment security purchased by a credit union for its 
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own account, an investment security that at the time 
of such purchase is rated in one of the 4 highest rat-
ing categories by at least 1 nationally recognized 
statistical rating organization. 
‘‘(5) CLARIFICATION
OF
PROHIBITION
ON 
STOCK OWNERSHIP.—No provision of this subsection 
shall be construed as authorizing a Federal credit 
union to purchase shares of stock of any corporation 
for the credit union’s own account, except as other-
wise permitted by law.’’. 
SEC. 3. INCREASE IN INVESTMENT LIMIT IN CREDIT UNION 
SERVICE ORGANIZATIONS. 
Section 107(a)(7)(I) of the Federal Credit Union Act 
(12 U.S.C. 1757(7)(I)) (as so redesignated by section 
2(1)) is amended by striking ‘‘up to 1 per centum of the 
total paid’’ and inserting ‘‘up to 3 percent of the total 
paid’’. 
SEC. 4. MEMBER BUSINESS LOAN EXCLUSION FOR LOANS 
TO NONPROFIT RELIGIOUS ORGANIZATIONS. 
Section 107A(a) of the Federal Credit Union Act (12 
U.S.C. 1757a(a)) is amended by inserting ‘‘, excluding 
loans made to nonprofit religious organizations,’’ after 
‘‘total amount of such loans’’. 
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SEC. 5. AUTHORITY OF NCUA TO ESTABLISH LONGER MA-
TURITIES 
FOR 
CERTAIN 
CREDIT 
UNION 
LOANS. 
Section 107(a)(5) of the Federal Credit Union Act 
(12 U.S.C. 1757(5)) (as so redesignated by section 2(1)) 
is amended in the matter preceding subparagraph (A), by 
striking ‘‘except as otherwise provided herein’’ and insert-
ing ‘‘or any longer maturity as the Board may allow, in 
regulations, except as otherwise provided in this Act’’. 
SEC. 6. PROVIDING THE NATIONAL CREDIT UNION ADMIN-
ISTRATION WITH GREATER FLEXIBILITY IN 
RESPONDING TO MARKET CONDITIONS. 
Section 107(a)(5)(A)(vi)(I) of the Federal Credit 
Union Act (12 U.S.C. 1757(5)(A)(vi)(I)) (as so redesig-
nated by section 2(1)) is amended by striking ‘‘six-month 
period and that prevailing interest rate levels’’ and insert-
ing ‘‘6-month period or that prevailing interest rate lev-
els’’. 
SEC. 7. CONVERSIONS OF CERTAIN CREDIT UNIONS TO A 
COMMUNITY CHARTER. 
Section 109(g) of the Federal Credit Union Act (12 
U.S.C. 1759(g)) is amended by inserting after paragraph 
(2) the following new paragraph: 
‘‘(3) CRITERIA FOR CONTINUED MEMBERSHIP 
OF CERTAIN MEMBER GROUPS IN COMMUNITY CHAR-
TER CONVERSIONS.—In the case of a voluntary con-
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version of a common-bond credit union described in 
paragraph (1) or (2) of subsection (b) into a com-
munity credit union described in subsection (b)(3), 
the Board shall prescribe, by regulation, the criteria 
under which the Board may determine that a mem-
ber group or other portion of a credit union’s exist-
ing membership, that is located outside the well-de-
fined local community, neighborhood, or rural dis-
trict that shall constitute the community charter, 
can be satisfactorily served by the credit union and 
remain within the community credit union’s field of 
membership.’’. 
SEC. 8. CREDIT UNION PARTICIPATION IN THE SBA SEC-
TION 504 PROGRAM. 
Section 107(a)(5)(A)(iii) of the Federal Credit Union 
Act (12 U.S.C. 1757(5)(A)(iii)) (as so redesignated by 
section 2(1)) is amended by inserting ‘‘, and applicable 
regulations,’’ after ‘‘specified in the law’’. 
SEC. 9. AMENDMENTS RELATING TO CREDIT UNION SERV-
ICE TO UNDERSERVED AREAS. 
(a) IN GENERAL.—Paragraph (2) of section 109(c) 
of the Federal Credit Union Act (12 U.S.C. 1759(c)(2)) 
is amended to read as follows: 
‘‘(2) EXCEPTION FOR UNDERSERVED AREAS.— 
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‘‘(A) IN GENERAL.—Notwithstanding sub-
section (b), the Board may approve an applica-
tion by a Federal credit union to allow the 
membership of such credit union to include any 
person or organization whose principal resi-
dence or place of business is located within a 
local community, neighborhood, or rural district 
if— 
‘‘(i) the Board determines— 
‘‘(I) at any time after August 7, 
1998, that all of the local community, 
neighborhood, or rural district taken 
into account for purposes of this para-
graph is an underserved area (as de-
fined in section 101(10)); and 
‘‘(II) at the time of such ap-
proval, that the credit union is well 
capitalized or adequately capitalized 
(as defined in section 216(c)(1)); and 
‘‘(ii) before the end of the 24-month 
period beginning on the date of such ap-
proval, the credit union has established 
and maintains an office or facility in the 
local community, neighborhood, or rural 
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district at which credit union services are 
available. 
‘‘(B) TERMINATION
OF
APPROVAL.—Any 
failure of a Federal credit union to meet the re-
quirement of clause (ii) of subparagraph (A) by 
the end of the 24-month period referred to in 
such clause shall constitute a termination, as a 
matter of law, of any approval of an application 
under this paragraph by the Board with respect 
to the membership of such credit union. 
‘‘(C) ANNUAL CREDIT UNION REPORTING 
REQUIREMENT.—Any 
Federal 
credit 
union 
which has an application approved under this 
paragraph shall submit an annual report to the 
Administration on the number of members of 
the credit union who are members by reason of 
such application and the number of offices or 
facilities maintained by the credit union in the 
local community, neighborhood, or rural district 
taken into account by the Board in approving 
such application. 
‘‘(D) 
PUBLICATION
BY
ADMINISTRA-
TION.—The Administration shall publish annu-
ally a report containing— 
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‘‘(i) a list of all the applications ap-
proved under this paragraph prior to the 
publication of the report; 
‘‘(ii) the number and locations of the 
underserved areas taken into account in 
approving such applications; and 
‘‘(iii) the total number of members of 
credit unions who are members by reason 
of the approval of such applications.’’. 
(b) UNDERSERVED AREA DEFINED.—Section 101 of 
the Federal Credit Union Act (12 U.S.C. 1752) is amend-
ed— 
(1) by striking ‘‘and’’ at the end of paragraph 
(8); 
(2) by striking the period at the end of para-
graph (9) and inserting ‘‘; and’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(10) the term ‘underserved area’ means a geo-
graphic area consisting of a single census tract or a 
group of census tracts, each of which meets the cri-
teria for— 
‘‘(A) a low income community, as defined 
in section 45D(e) of the Internal Revenue Code 
of 1986; or 
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‘‘(B) an investment area, as defined and 
designated under section 103(16) of the Com-
munity Development Banking and Financial In-
stitutions Act of 1994.’’. 
SEC. 10. SHORT-TERM PAYDAY LOAN ALTERNATIVES WITH-
IN FIELD OF MEMBERSHIP. 
Section 107(a)(12)(B) of the Federal Credit Union 
Act (12 U.S.C. 1757(12)(B)) (as so redesignated by sec-
tion 2(1)) is amended by inserting ‘‘and provide short- 
term loans as an alternative to payday loans’’ after ‘‘do-
mestic electronic fund transfers’’. 
SEC. 11. CREDIT UNION GOVERNANCE. 
(a) EXPULSION OF MEMBERS FOR JUST CAUSE.— 
Subsection (b) of section 118 of the Federal Credit Union 
Act (12 U.S.C. 1764(b)) is amended to read as follows: 
‘‘(b) POLICY AND ACTIONS OF BOARDS OF DIREC-
TORS OF FEDERAL CREDIT UNIONS.— 
‘‘(1) EXPULSION
OF
MEMBERS
FOR
NON-
PARTICIPATION OR FOR JUST CAUSE.—The board of 
directors of a Federal credit union may, by majority 
vote of a quorum of directors, adopt and enforce a 
policy with respect to expulsion from membership, 
by a majority vote of such board of directors, based 
on just cause, including disruption of credit union 
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operations, or on nonparticipation by a member in 
the affairs of the credit union. 
‘‘(2) WRITTEN
NOTICE
OF
POLICY
TO
MEM-
BERS.—If a policy described in paragraph (1) is 
adopted, written notice of the policy as adopted and 
the effective date of such policy shall be provided 
to— 
‘‘(A) each existing member of the credit 
union not less than 30 days prior to the effec-
tive date of such policy; and 
‘‘(B) each new member prior to or upon 
applying for membership.’’. 
(b) TERM LIMITS AUTHORIZED FOR BOARD MEM-
BERS OF FEDERAL CREDIT UNIONS.—Section 111(a) of 
the Federal Credit Union Act (12 U.S.C. 1761(a)) is 
amended by adding at the end the following new sentence: 
‘‘The bylaws of a Federal credit union may limit the num-
ber of consecutive terms any person may serve on the 
board of directors of such credit union.’’. 
SEC. 12. ENCOURAGING SMALL BUSINESS DEVELOPMENT 
IN UNDERSERVED URBAN AND RURAL COM-
MUNITIES. 
Section 107A(c)(1)(B) of the Federal Credit Union 
Act (12 U.S.C. 1757a(c)(1)(B)) is amended— 
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(1) by striking ‘‘or’’ after the semicolon at the 
end of clause (iv); 
(2) by redesignating clause (v) as clause (vi); 
and 
(3) by inserting after clause (iv) the following 
new clause: 
‘‘(v) that is made to a member, the 
proceeds of which are to be used for com-
mercial, corporate, business, farm or agri-
cultural purposes in an underserved area if 
such extension of credit— 
‘‘(I) is made to a person or orga-
nization whose principal residence or 
place of business is located within an 
underserved area (as defined in sec-
tion 101(10)) served by the credit 
union; or 
‘‘(II) is secured by real property 
located within, or is intended to oper-
ate as part of a business located with-
in, such underserved area; or’’. 
SEC. 13. EXEMPTION FROM PRE-MERGER NOTIFICATION 
REQUIREMENT OF THE CLAYTON ACT. 
Section 7A(c)(7) of the Clayton Act (15 U.S.C. 
18a(c)(7)) is amended by inserting ‘‘section 205(b)(3) of 
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