The U.S. House Financial Services Committee advanced, on a voice vote, H.R. 2311, the Credit Union Modernization Act, which would provide federal credit unions the ability to expel disruptive members for cause with a two-thirds vote of the credit union’s board of directors. The bill would put federally chartered credit unions on par with Nebraska’s state-chartered credit unions which have expulsion powers already.
The bill defines cause as a material loss to a federal credit union, a violation of the membership agreement, substantial disruption of the operation of the credit union, fraud, attempted fraud, other illegal behavior, dangerous or abusive behavior including but not limited to physical or verbal abuse of staff or members. The federal credit union board of directors would create a policy defining causes for expulsion. An expelled member would have the ability to request a hearing before the board and that request must be granted. Following the hearing, the board of directors would vote on the expulsion. An expelled member would also have the ability to request reinstatement which would require a two-thirds vote of the credit union’s membership present at the meeting to reinstate to member.
Nebraska U.S. Senator Ben Sasse introduced the Senate’s version S. 1767, the Credit Union Employee and Member Safety Act, at the urging of the League.
