House Committee Approves CU Member Expulsion Bill

The House Financial Services Committee on Tuesday approved legislation that would make it easier for credit unions to expel members who pose a threat or engage in dangerous or illegal conduct.

The committee approved the bill by voice vote, after committee members described horror stories about abusive credit union members who could not be immediately expelled. Under current law, a credit union must hold a membership meeting to expel members.

The bill, sponsored by Rep. Tom Emmer, R-Minn. and Rep. Ed Perlmutter, D-Colo., would allow a credit union to hold a board meeting to expel a member. Two-thirds of a quorum of a credit union’s board would be needed to expel a member. The legislation also would allow a member to apply for reinstatement.

Perlmutter, in explaining the need for the bill, said that two credit union members robbed a Colorado credit union, but remained members for a year before being expelled.

Rep. William Timmons, R-S.C., said that at one credit union, a member consistently made derogatory comments to employees until the expulsion process was used to expel the member. “This bill is a no-brainer,” he said.

The Credit Union National Association and the National Association of Federally-Insured Credit Unions supported the measure.

“This bill will establish better protections for credit unions dealing with members who engage in unlawful behavior by providing clearer expulsion regulations,” NAFCU Vice President of Legislative Affairs Brad Thaler said, following the vote.

“CUNA strongly supports this legislation which would allow credit unions the ability to better protect members and employees,” CUNA President/CEO Jim Nussle wrote in a letter to the committee.

The committee also passed by voice vote a bill that would expand employment opportunities at banks and credit unions for people convicted of minor criminal offenses.

The bill reduces the “look back” period for criminal charges from an indeterminate timeline to those that are over seven years old if a person has been released from incarceration for at least five years. The bill also states that criminal charges that have been expunged, sealed or dismissed are not included in consideration of a person’s eligibility to be employed.

Rep. Joyce Beatty, D-Ohio, chairwoman of the Financial Services Committee’s Diversity and Inclusion Subcommittee, said that “justice-involved individuals are shut out” from many jobs.

Financial Services Committee ranking Republican, Rep. Patrick McHenry of North Carolina, said he supported the bill, adding that the movement to expand employment opportunities for people convicted of crime started during the Trump Administration. “We’re a nation of second chances,” McHenry said.

In 2019, the National Credit Union Administration board approved a policy statement designed to make it easier for people convicted of minor offenses to be employed by credit unions.

Related:

Financial Service Committee to Consider CU Member Expulsion Bill

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