September 29, 2022

House passes NAFCU-backed CU board modernization bill

CapitolThe House Thursday passed a package of bills en bloc that included the NAFCU-backed Credit Union Board Modernization Act by a 296-127 vote. The bill was introduced in March by Reps. Juan Vargas, D-Calif., and Anthony Gonzalez, R-Ohio.  

The bill modifies existing language in the Federal Credit Union Act related to the requirement that credit union boards meet once a month. During debate on the House floor, Chairwoman of the House Financial Committee Maxine Waters, D-Calif., noted that de novo credit unions, and any credit union with a CAMELS rating system score of three or lower, will still be required to meet monthly until it can stabilize operations – at which point, it can meet bimonthly.

NAFCU reiterated its support for the bill in a letter to House on Monday. In the letter, Senior Vice President of Government Affairs Greg Mesack said the bill gives credit unions more flexibility and relieves burdens for smaller credit unions. In addition, Mesack detailed the benefits of modernizing outdated requirements that do not consider the connectivity and technology available today, noting “[…] credit union boards are able to communicate in an ongoing manner that has negated the necessity of monthly meetings.”

During the House floor debate, Rep. Bryan Steil, R-Wis., reiterated Mesack’s sentiment, stating that the monthly meeting requirement is burdensome and takes away resources that the credit union could use to serve its members.

NAFCU also wrote to the House Financial Services Committee, urging support the bill ahead of its July markupA Senate version of the legislation, S. 4325, introduced in May by Sens. Kyrsten Sinema, D-Ariz., and Bill Hagerty, R-Tenn., currently has over 20 bipartisan cosponsors.

The association will monitor further movement on the bill and will update credit unions via NAFCU Today.