I 
108TH CONGRESS 
1ST SESSION H. R. 3579
To ease credit union regulatory burdens, advance credit union efforts to 
promote economic growth, and modernize credit union capital standards. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 21, 2003
Mr. ROYCE (for himself, Mr. KANJORSKI, Mr. LATOURETTE, and Mrs. 
MALONEY) introduced the following bill; which was referred to the Com-
mittee on Financial Services 
A BILL 
To ease credit union regulatory burdens, advance credit 
union efforts to promote economic growth, and modernize 
credit union capital standards.
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 Regu-
latory Improvements Act of 2003’’.
TITLE I—REGULATORY 
FLEXIBILITY 
SEC. 102. LEASES OF LAND ON FEDERAL FACILITIES FOR 
CREDIT UNIONS. 
(a) IN GENERAL.—Section 124 of the Federal Credit 
Union Act (12 U.S.C. 1770) is amended—
(1) by striking ‘‘Upon application by any credit 
union’’ and inserting ‘‘Notwithstanding any other 
provision of law, upon application by any credit 
union’’; 
(2) by inserting ‘‘on lands reserved for the use 
of, and under the exclusive or concurrent jurisdiction 
of, the United States or’’ after ‘‘officer or agency of 
the United States charged with the allotment of 
space’’; 
(3) by inserting ‘‘lease land or’’ after ‘‘such of-
ficer or agency may in his or its discretion’’; and 
(4) by inserting ‘‘or the facility built on the 
leased land’’ after ‘‘credit union to be served by the 
allotment of space’’. 
(b) CLERICAL AMENDMENT.—The heading for sec-
tion 124 is amended by inserting ‘‘OR FEDERAL LAND’’ 
after ‘‘BUILDINGS’’.
SEC. 103. INVESTMENTS IN SECURITIES BY FEDERAL CRED-
IT UNIONS. 
Section 107 of the Federal Credit Union Act (12 
U.S.C. 1757) is amended—
(1) in the matter preceding paragraph (1) by 
striking ‘‘A Federal credit union’’ and inserting ‘‘(a) 
IN GENERAL.—Any 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.—A Federal credit union may 
purchase and hold for its own account such invest-
ment securities of investment grade as the Board 
may authorize by regulation, subject to such limita-
tions and restrictions as the Board may prescribe in 
the regulations. 
‘‘(2) PERCENTAGE LIMITATIONS.— 
‘‘(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 
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. 104. INCREASE IN GENERAL 12-YEAR LIMITATION OF 
TERM OF FEDERAL CREDIT UNION LOANS TO 
15 YEARS. 
Section 107(a)(5) of the Federal Credit Union Act 
(12 U.S.C. 1757(5)) (as so designated by section 103 of 
this title) is amended—
(1) in the matter preceding subparagraph (A), 
by striking ‘‘to make loans, the maturities of which 
shall not exceed twelve years except as otherwise 
provided herein’’ and inserting ‘‘to make loans, the 
maturities of which shall not exceed 15 years or any 
longer maturity as the Board may allow, in regula-
tions, except as otherwise provided in this Act’’; 
(2) in subparagraph (A)—
(A) by striking clause (ii); 
(B) by redesignating clauses (iii) through 
(x) as clauses (ii) through (ix), respectively; and 
(C) by inserting ‘‘and’’ after the semicolon 
at the end of clause (viii) (as so redesignated). 
SEC. 105. INCREASE IN 1 PERCENT 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 designated by section 103
of this title) is amended by striking ‘‘up to 1 per centum 
of the total paid’’ and inserting ‘‘up to 3 percent of the 
total paid’’. 
SEC. 106. 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’’. 
SEC. 107. CHECK CASHING AND MONEY TRANSFER SERV-
ICES OFFERED WITHIN THE FIELD OF MEM-
BERSHIP. 
Paragraph (12) of section 107(a) of the Federal 
Credit Union Act (12 U.S.C. 1757(12)) (as so designated 
by section 103 of this title) is amended to read as follows: 
‘‘(12) in accordance with regulations prescribed 
by the Board—
‘‘(A) to sell, to persons in the field of 
membership, negotiable checks (including trav-
elers checks), money orders, and other similar 
money transfer instruments (including elec-
tronic fund transfers); and 
‘‘(B) to cash checks and money orders and 
provide electronic fund transfer services for per-
sons in the field of membership for a fee;’’.
SEC. 108. VOLUNTARY MERGERS INVOLVING MULTIPLE 
COMMON-BOND CREDIT UNIONS. 
Section 109(d)(2) of the Federal Credit Union Act 
(12 U.S.C. 1759(d)(2)) is amended—
(1) by striking ‘‘or’’ at the end of clause (ii) of 
subparagraph (B); 
(2) by striking the period at the end of sub-
paragraph (C) and inserting ‘‘; or’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(D) a merger involving any such Federal 
credit union approved by the Board on or after 
August 7, 1998.’’. 
SEC. 109. CONVERSIONS INVOLVING COMMON-BOND CRED-
IT UNIONS. 
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-
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. 110. 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 
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.’’. 
(c) REIMBURSEMENT
FOR LOST WAGES DUE
TO 
SERVICE ON CREDIT UNION BOARD NOT TREATED AS 
COMPENSATION.—Section 111(c) of the Federal Credit 
Union Act (12 U.S.C. 1761(c)) is amended by inserting 
‘‘, including lost wages,’’ after ‘‘the reimbursement of rea-
sonable expenses’’. 
SEC. 111. PROVIDING THE NATIONAL CREDIT UNION AD-
MINISTRATION WITH GREATER FLEXIBILITY 
IN RESPONDING TO MARKET CONDITIONS. 
Section 107(a)(5)(A)(v)(I) of the Federal Credit 
Union Act (12 U.S.C. 1757(5)(A)(v)(I)) (as so designated
by sections 103 and 104 of this title) is amended by strik-
ing ‘‘six-month period and that prevailing interest rate lev-
els’’ and inserting ‘‘6-month period or that prevailing in-
terest rate levels’’. 
SEC. 112. CREDIT UNIONS AUTHORIZED TO LEASE SPACE 
IN BUILDINGS IN CREDIT UNION OFFICES IN 
UNDERSERVED AREAS. 
(a) IN GENERAL.—Section 107(a) of the Federal 
Credit Union Act (12 U.S.C. 1757) (as so designated by 
section 103 of this title) is amended—
(1) by striking ‘‘and’’ at the end of paragraph 
(16); 
(2) by redesignating paragraph (17) as para-
graph (18); and 
(3) by inserting after paragraph (16) the fol-
lowing new paragraph: 
‘‘(17) with regard to any building purchased or 
constructed by the credit union for a credit union of-
fice or credit union operations in an underserved 
area, to lease office space in such building that is 
separate and clearly distinct from any office or oper-
ation of the credit union to any business enterprise, 
subject to such regulations the Board may prescribe, 
taking into account the safety and soundness of the 
credit union; and’’.