New Rules for Expelling Credit Union Members
This act changes the rules for how credit unions can expel their members. It introduces clear procedures, such as mandatory notification and the right to a hearing, providing members with greater protection. The aim is to ensure fairness in the expulsion process while allowing credit unions to remove individuals who harm their operations or other members.
Key points
Credit unions must have a written policy for expelling members, approved by the board.
A member must be notified of the intent to expel and the reason, with the option to receive information electronically.
A member has 15 days to request a hearing before the credit union's board of directors.
After a hearing, the board votes on expulsion; if no hearing is requested, the member is automatically expelled after 15 days.
An expelled member can request reinstatement, which requires a two-thirds vote of members present at a meeting.
Causes for expulsion include material loss to the credit union, violation of membership agreement, substantial disruption, fraud, illegal, or abusive behavior.
Expired
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