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(From the NCUA) – The NCUA Board unanimously approved a final rule that amends the standard federal credit union bylaws to adopt a policy by which a federal credit union member may be expelled for cause by a two-thirds vote of a quorum of the credit union’s board of directors.
“The final rule we are considering today strikes a balance between addressing the legitimate concerns over providing services to violent and disruptive members and providing due process rights to credit union member-owners. These rights include proper disclosures, hearings, and an appeals process,” NCUA Chairman Todd M. Harper said. “The powers granted in the Credit Union Governance Modernization Act must not be used as a tool to facilitate financial exclusion. What’s more, a federal credit union must ensure its implementation of the authority to expel members for cause is consistent and does not violate anti-discrimination laws or regulations.”
Under the Credit Union Governance Modernization Act of 2022, enacted by Congress on March 15, 2022, the NCUA had until September 15, 2023, to develop a final rule that federal credit unions may adopt to expel a member for cause.
The final rule is effective 30 days after publication in the Federal Register.