Credit Union Governance Modernization Act of 2021
Bill: H.R.2311 | Sponsor: Rep. Emmer, Tom (R-MN)
Policy area: Finance and Financial Sector

Summary:
Credit Union Governance Modernization Act of 2021
This bill revises the procedure for expelling members from a federal credit union. Specifically, a member may be expelled for cause pursuant to a policy adopted by a majority vote of a quorum of the directors of a credit union. Currently, a member may be expelled by a two-thirds vote of the credit union membership present at a special meeting.
The member may request a hearing from the board of directors. After the hearing, the board shall hold a vote on expelling the member.
The expelled member may request reinstatement through a two-thirds vote of the members present at a meeting.
Member conduct that may be cause for expulsion includes

To amend the Federal Credit Union Act to modernize certain processes 
 regarding expulsion of credit union members for cause, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Credit Union Governance 
Modernization Act of 2021''.

SEC. 2. EXPULSION OF FEDERAL CREDIT UNION MEMBERS FOR CAUSE.

    Section 118(a) of the Federal Credit Union Act (12 U.S.C. 1764(a)) 
is amended to read as follows:
    ``(a) Expulsion for Cause.--
            ``(1) In general.--Except as provided in subsection (b) of 
        this section, a member may be expelled for cause pursuant to a 
        policy adopted by a majority vote of a quorum of the directors 
        of the Federal credit union and provided in written or 
        electronic form to all members of the Federal credit union.
            ``(2) Procedures.--
                    ``(A) Notification of pending expulsion.--If a 
                member will, subject to the policy adopted under 
                paragraph (1), be subject to expulsion, the member 
                shall be notified in advance of the expulsion, along 
                with the reason for such expulsion. Such notice shall 
                be provided in written form or, if the member has 
                elected to receive electronic communications from the 
                Federal credit union, may be provided electronically.
                    ``(B) Right to a hearing.--
                            ``(i) In general.--A member shall have 15 
                        days from the date of receipt of a notification 
                        under subparagraph (A) to request a hearing 
                        from the board of directors of the Federal 
                        credit union.
                            ``(ii) Expulsion if no hearing.--If a 
                        member does not request a hearing during the 
                        15-day period described under clause (i), the 
                        member shall be expelled after the end of the 
                        15-day period.
                    ``(C) Hearing; vote on expulsion.--If a member 
                requests a hearing during the 15-day period described 
                under subparagraph (B)(i)--
                            ``(i) the board of directors of the Federal 
                        credit union shall provide the member with a 
                        hearing; and
                            ``(ii) after such hearing, the board of 
                        directors of the Federal credit union shall 
                        hold a vote on expelling the member in a timely 
                        manner.
                    ``(D) Notice of expulsion.--If a member is expelled 
                under subparagraph (B)(ii) or (C)(ii), the member shall 
                be provided with written or electronic notice of the 
                expulsion.
            ``(3) Reinstatement.--
                    ``(A) In general.--A member expelled under this 
                subsection--
                            ``(i) shall be given an opportunity to 
                        request reinstatement of membership; and
                            ``(ii) may be reinstated by a two-thirds 
                        vote of the members of the Federal credit union 
                        present at a meeting.
                    ``(B) Rule of construction.--Nothing in this 
                paragraph may be construed to require that an expelled 
                member be allowed to attend the meeting described in 
                subparagraph (A)(ii) in person.
            ``(4) Cause defined.--In this subsection, the term `cause' 
        includes--
                    ``(A) a material loss to the Federal credit union;
                    ``(B) a violation of the membership agreement of 
                the Federal credit union;
                    ``(C) a substantial disruption to the operations of 
                a Federal credit union; and
                    ``(D) fraud, attempted fraud, other illegal 
                behavior, or dangerous or abusive behavior, as defined 
                by the policy described in paragraph (1), such as 
                physical or verbal abuse of Federal credit union 
                members or staff.''.
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