CU Trades: Simplified member expulsion process is still too complex

A proposed NCUA rule designed to make it easier for credit unions to expel members is still far too complicated, credit union trade groups told the agency late last week.

In March, Congress passed the Credit Union Governance Modernization Act (CUGMA), which allows credit unions to expel members for cause by a vote of two-thirds of a quorum of the board of directors. Previously, a membership vote had been required to expel a member.

The NCUA has now proposed adopting the policy, and both CUNA and NAFCU have raised concerns. 

“Credit unions desperately need a solution that provides them with a streamlined, straightforward mechanism for expelling problem members that is cognizant of the unique and varied nature of the credit union industry,” James Akin, NAFCU’s regulatory affairs counsel, told the agency. “This proposal is not that solution.”

CUNA agreed.

 

continue reading »