CU Governance Modernization Bill Passes, Heads to President’s Desk
The legislation also increases CDFI funding to $295 million.
The Credit Union Governance Modernization Bill, included inside the $1.5 trillion omnibus spending package to fund the Federal government, passed the Senate on Thursday with a 68-31 vote. The legislation will update the Federal Credit Union Act to allow credit union boards to expel members for just cause, rather than going through a full membership vote.
The passage of the legislation came four months after the House Financial Services Committee voted to move the bill forward after Reps. Tom Emmer (R-Minn.) and Ed Perlmutter (D-Colo.) introduced it earlier in 2021.
“NAFCU commends the passage of this package and applauds all the congressional leaders who worked tirelessly to include legislation that is critical to protecting credit unions across the country,” NAFCU President/CEO Dan Berger said. “This omnibus package is a win not only for credit unions that have relentlessly helped their members navigate the financial insecurities brought on by the pandemic, but for Main Street small businesses and families who rely on credit unions for financial services.”
“This common-sense bill will allow credit unions to ensure the safety of their branches, employees and members, keeping resources focused on improving consumers’ financial well-being,” Jim Nussle, CUNA president/CEO, said. “We thank Reps. Emmer and Perlmutter, as well as Sens. Tina Smith and Ben Sasse, for working with CUNA and the Leagues on this important issue.”
In a statement, Rep. Emmer said, “We can all agree that Americans should have access to safe and reliable financial services. Federal credit unions must have a streamlined process for removing dangerous members from the credit union. Up until now, we have failed in providing this because the current law is outdated and ineffective. My bill, the Credit Union Governance Modernization Act, will keep credit union members and employees safe by creating a framework for federal credit unions to swiftly remove a member for cause. We must prioritize a financial system that keeps Americans safe.”
Also included in the legislation was an increase in the funding for Community Development Financial Institutions of $295 million, up $25 million from the previous year. The bill also provided $1.545 million for the NCUA’s Community Development Revolving Loan Fund.
The legislation is now headed to President Joe Biden’s desk, where it is expected to be signed into law.