Bill Summary
The Credit Union Governance Modernization Act of 2020 is a bill that aims to amend the Federal Credit Union Act in order to modernize the process of expelling credit union members for certain reasons. This includes updating the process for removing members for cause, such as causing harm to the credit union, violating the membership agreement, or engaging in fraudulent or inappropriate behavior. The bill also requires that expelled members be provided with written or electronic notice and have the opportunity to request reinstatement. It does not, however, require the board of directors to allow an expelled member to address them in person. This legislation aims to streamline and modernize the process of removing members from credit unions.
Possible Impacts
1. This legislation could affect members of federal credit unions by providing a specific and transparent process for expulsion from the union. This could potentially protect members from being unfairly expelled without proper cause or due process.
2. The "Credit Union Governance Modernization Act of 2020" could also impact the operations and decision-making processes of federal credit unions by requiring a majority vote of the directors and written notice to all members before expelling a member for cause. This could potentially lead to more careful and thoughtful decision making by credit union leaders.
3. The inclusion of specific examples of what constitutes "cause" for expulsion, such as fraud or physical abuse, could also potentially protect members from experiencing harmful or illegal behavior within the credit union. It could also hold members accountable for their actions, leading to a safer and more respectful environment for all members.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3323 Introduced in Senate (IS)]
<DOC>
116th CONGRESS
2d Session
S. 3323
To amend the Federal Credit Union Act to modernize certain processes
regarding expulsion of credit union members for cause, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 24, 2020
Ms. Smith (for herself and Mr. Sasse) introduced the following bill;
which was read twice and referred to the Committee on Banking, Housing,
and Urban Affairs
_______________________________________________________________________
A BILL
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 2020''.
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--
(1) by striking ``Except'' and inserting ``(1) Except'';
(2) by striking ``by a two-thirds vote of the members of a
Federal credit union present at a special meeting called for
the purpose, but only after opportunity has been given him to
be heard'' and inserting ``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''; and
(3) by adding at the end the following:
``(2)(A) Any member expelled pursuant to this paragraph shall--
``(i) be provided with written or electronic notice of the
reason for the expulsion; and
``(ii) be given an opportunity to request reinstatement of
membership and have the request considered at a meeting of the
board of directors, in a timely manner after the expulsion.
``(B) Nothing in this paragraph may be construed to require a board
of directors to allow an expelled member to address the board in person
or attend the meeting described in subparagraph (A)(ii) in person.
``(3) In this subsection, the term `cause' includes--
``(A) a loss to the Federal credit union;
``(B) a violation of the membership agreement of the
Federal credit union;
``(C) a disruption to the operations of a Federal credit
union; and
``(D) fraud, attempted fraud, other illegal behavior or
inappropriate 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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