NCUA headquarters. (Source: NCUA)
Credit union groups CUNA and NAFCU have long supported the Credit Union Governance Modernization Act (CUGMA), which became law in March. The law now requires the NCUA to develop a policy for federal credit unions to use in order to expel a member for cause by a two-thirds vote of a quorum from the credit union's board of directors.
Before the NCUA finalizes its proposed rule to amend bylaws concerning member expulsion, CUNA and NAFCU asked the federal agency to ensure credit unions aren't overburdened by the process.
In letters from both organizations sent to the NCUA Friday, officials asked the agency to adopt a realistic expulsion policy.
NAFCU Regulatory Affairs Counsel James Akin wrote to the NCUA to create an expulsion policy that "avoids overly burdensome requirements, provides clear guidelines, and prioritizes the safety and welfare of credit union staff and boards of directors."
According to the letter, Akin specifically asked the NCUA to do the following:
- Avoid including requirements in the final rule that are not found in the CUGMA, such as the right for a member to appeal their expulsion.
- Provide clarity around the notice requirements and equitably distribute the burden of ensuring receipt of the notice and request for hearing.
- Allow the option for in-person, virtual or on-the-papers hearings, at the discretion of a credit union's board of directors.
"NAFCU urges the board to recognize the difficult position that credit unions face in the absence of a functional member expulsion policy and issue a final rule that is flexible and easy to use," Akin stated.
According to CUNA's letter, "We agree with the NCUA that the expulsion of members is an extreme remedy that may have the effect of denying individuals access to financial services. Further, we support the statement in the legislative history that use of the authority under CUGMA should be 'rare and saved for egregious examples of member behavior.'"
The letter also stated "it is vital that this new authority be promulgated through regulation in a manner that makes it possible and practical for a federal credit union to utilize in practice."
Comments to the NCUA on its proposed rule were due on Dec. 2. According to the NCUA's database, 25 leagues, organizations and credit unions submitted comments.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
