[Congressional Record Volume 169, Number 19 (Monday, January 30, 2023)]
[House]
[Pages H501-H502]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  CREDIT UNION BOARD MODERNIZATION ACT

  Mr. McHENRY. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 582) to amend the Federal Credit Union Act to modify the 
frequency of board of directors meetings, and for other purposes.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                                H.R. 582

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Credit Union Board 
     Modernization Act''.

     SEC. 2. FREQUENCY OF BOARD OF DIRECTORS MEETINGS.

       Section 113 of the Federal Credit Union Act (12 U.S.C. 
     1761b) is amended--
       (1) by striking ``monthly'' each place such term appears;
       (2) in the matter preceding paragraph (1), by striking 
     ``The board of directors'' and inserting the following:
       ``(a) In General.--The board of directors'';
       (3) in subsection (a) (as so designated), by striking 
     ``shall meet at least once a month and''; and
       (4) by adding at the end the following:
       ``(b) Meetings.--The board of directors of a Federal credit 
     union shall meet as follows:
       ``(1) With respect to a de novo Federal credit union, not 
     less frequently than monthly during each of the first five 
     years of the existence of such Federal credit union.
       ``(2) Not less than six times annually, with at least one 
     meeting held during each fiscal quarter, with respect to a 
     Federal credit union--
       ``(A) with composite rating of either 1 or 2 under the 
     Uniform Financial Institutions Rating System (or an 
     equivalent rating under a comparable rating system); and
       ``(B) with a capability of management rating under such 
     composite rating of either 1 or 2.
       ``(3) Not less frequently than once a month, with respect 
     to a Federal credit union--
       ``(A) with composite rating of either 3, 4, or 5 under the 
     Uniform Financial Institutions Rating System (or an 
     equivalent rating under a comparable rating system); or
       ``(B) with a capability of management rating under such 
     composite rating of either 3, 4, or 5.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
North Carolina (Mr. McHenry) and the gentlewoman from California (Ms. 
Waters) each will control 20 minutes.
  The Chair recognizes the gentleman from North Carolina.


                             General Leave

  Mr. McHENRY. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days in which to revise and extend their remarks 
and include extraneous material on this bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from North Carolina?
  There was no objection.
  Mr. McHENRY. Mr. Speaker, I yield myself such time as I may consume.
  I rise in support of H.R. 582, the Credit Union Board Modernization 
Act.
  Every day, consumers in each of our districts rely on their local 
credit union to help them with things like securing a loan to buy a 
home, saving for retirement, or even financing tuition. This means that 
credit unions need to spend their time working with their members, not 
wasting valuable resources and staff time checking the box on monthly 
meetings that may not be necessary.
  This bill allows credit unions to do that important work. By updating 
the Federal Credit Union Act to reduce the frequency of required board 
meetings, certain Federal credit unions will have greater flexibility 
in meeting requirements. At the same time, the safety and soundness of 
the financial system will be protected.
  Currently, Federal credit union boards are required to meet at least 
once per month. Under the bill's new requirements, Federal credit 
unions with a composite CAMELS rating of 1 or 2 will be required to 
meet at least six times annually, with at least one meeting held during 
each fiscal quarter.
  What does that mean? It means entities with the strongest performance 
and risk management practices will be rewarded. That means, instead of 
checking the box on those monthly meetings, if they have high-quality 
performance and risk management, they will be relieved of some of those 
burdens.
  To be clear, this is not a one-size-fits-all mandate. There is 
nothing in the bill that prevents those credit union boards from 
meeting each month or even more often, if needed, and they do. In times 
of financial stress, these boards meet quite frequently to assess risks 
and to protect their members' nest eggs.
  This bill also acknowledges that new or poor-performing credit unions 
may require more regular meetings to ensure that they can provide the 
level of service their communities deserve. This legislation continues 
to require monthly meetings for new Federal credit unions during the 
first 5 years of existence.
  In addition, credit unions with a composite CAMELS rating of 3, 4, or 
5 must continue to meet once a month. These are the credit unions that 
need to improve performance and risk management practices to ensure the 
safety and soundness of our financial system.
  Mr. Speaker, I will finish with this: This bill is a good 
illustration of how Members can come together to create bipartisan 
legislation to modernize outdated practices and policies for the 
benefit of our communities' financial institutions and for their 
members.
  Mr. Speaker, I commend my colleague, the gentleman from Michigan (Mr. 
Huizenga), the chair of the Subcommittee on Oversight and 
Investigations, for his good work last Congress and this Congress on 
this bill, and a bipartisan bill indeed this is.
  Mr. Speaker, I reserve the balance of my time, and I urge my 
colleagues' adoption and support of this bill.
  Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
  I rise in support of H.R. 582, the Credit Union Board Modernization 
Act, sponsored by Representative Vargas.
  This bill would modernize Federal requirements for Federal credit 
union board meetings to match a flexibility included in State credit 
union charter

[[Page H502]]

requirements in 17 States, including my State of California.
  Specifically, Federal credit unions are currently required to meet 
monthly. Under this bill, Federal credit unions that receive high 
ratings from the regulator would only be required to meet six times 
annually, with at least one meeting held during each fiscal quarter.
  To ensure stability and mitigate the risk of institutional failure, 
this bill retains certain safeguards. For example, Federal credit 
unions that receive low exam ratings would still be required to meet at 
least monthly, as well as newly formed Federal credit union boards 
during the first 5 years of their charter.
  Additionally, if emergencies or issues arise requiring a board 
meeting, nothing in the bill prevents Federal credit unions from 
meeting more frequently than what is required.
  Mr. Speaker, I urge my colleagues to support this bill, and I reserve 
the balance of my time.
  Mr. McHENRY. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Michigan (Mr. Huizenga), the chair of the Financial 
Services Committee's Subcommittee on Oversight and Investigations.
  Mr. HUIZENGA. Mr. Speaker, I thank Chairman McHenry for yielding me 
time this afternoon.
  I rise today in support of the Credit Union Board Modernization Act 
and ask for its immediate passage.
  Credit unions can play an important role in many of our local 
communities, often working with families and small business owners to 
gain access to credit.
  H.R. 582 will go a long way to providing reasonable regulatory relief 
for credit unions, especially in Michigan's Fourth Congressional 
District and across the Nation.

                              {time}  1715

  Mr. Speaker, if signed into law, these commonsense, reasonable 
reforms will allow federally chartered credit unions in good standing 
in Michigan and across the country the same reasonable governance 
practices afforded to those at the State level.
  Currently, all federally chartered credit union boards must meet at 
least once month. This one-size-fits-all requirement often negatively 
impacts smaller rural credit unions, which ultimately impacts, frankly, 
which members are willing to even serve on those boards and therefore 
the services that they can and will be able to provide to their local 
community.
  The Credit Union Board Modernization Act rightly modernizes how often 
federally chartered credit union boards must meet, which the National 
Credit Union Administration currently mandates to be monthly. Nothing 
in this legislation prevents a credit union from meeting more than six 
times a year. It just gives them the flexibility and they are able to 
then decide. That is the idea of a credit union; member-driven, they 
will decide.
  Mr. Speaker, I thank the sponsor of this bill, the gentleman from 
California (Mr. Vargas) for working with Republicans, and specifically 
me, this last Congress to implement these reasonable safeguards.
  I do want to note, specifically, this legislation does not apply to 
new credit unions or those credit unions with low exam ratings, as the 
chair had indicated. Highly rated credit unions with high management 
ratings must hold at least six meetings annually, with at least one 
meeting held during each fiscal quarter.
  Alternatively, these lower-rated credit unions must continue to meet 
once a month, and there will be direction on that, as the chair has 
outlined.
  I want to be clear. This bill does not give credit unions an 
advantage over their community bank counterparts but brings parity to 
an outdated process.
  Again, I thank Congressman Vargas for his commitment to make this a 
bipartisan effort. I look forward to seeing these reforms, which will 
strengthen local economies across the Nation, enacted into law.
  Ms. WATERS. Mr. Speaker, I yield myself the balance of my time for 
closing.
  Mr. Speaker, I applaud Mr. Vargas' efforts to work on this bipartisan 
bill and appreciate that the reforms in this bill have been structured 
in a way to incentivize credit union boards to take steps to ensure 
their institutions are safe, sound, and well managed.
  This bill has broad support, including from credit unions, like the 
California and Nevada Credit Union Leagues, to consumer groups like 
Americans for Financial Reform.
  I am pleased to work with Mr. Vargas to advance this bill through the 
House. I was pleased to do this in the last Congress.
  Mr. Speaker, I urge my colleagues to support this bill, and I yield 
back the balance of my time.
  Mr. McHENRY. Mr. Speaker, I yield myself the balance of my time for 
closing.
  This is the case on the House Financial Services Committee, when we 
see a challenge that has a commonsense solution, we try to tackle it 
and we try to tackle it in a bipartisan way.
  I want to concur with Mr. Huizenga in his praise of Mr. Vargas. This 
was a bipartisan bill between Mr. Vargas and Mr. Huizenga last 
Congress, and it continues to be a bipartisan bill this Congress.
  I thank my colleague, Mr. Vargas, for offering it, and I thank the 
ranking member for working with me and with my team to bring these 
three bipartisan bills before the full House in the opening month of 
Congress.
  Mr. Speaker, I urge this bill's adoption, and I yield back the 
balance of my time.
  Ms. JACKSON LEE. Mr. Speaker, I rise today in support of H.R. 582, 
the ``Credit Union Board Modernization Act'' which would give credit 
unions more flexibility in their governance by not mandating monthly 
board meetings.
  H.R. 582 would allow credit unions to dedicate more time and 
resources to serving their members by reducing the frequency that the 
board of directors of a federal credit union would be required to meet 
each year.
  In the modern world, with increased connectivity from today's 
technology, boards of Credit Unions should not be subjected to mandated 
minimum meetings but should be provided with the flexibility to 
determine the frequency of their meetings as provided within the 
guidelines outlined in this bill.
  By modernizing Credit Unions, we are ensuring that working class 
people who are exercising their right to choose what financial service 
they want, get the most from their chosen service.
  This bill would be helpful to small credit unions, especially those 
that are closest to individual communities and whose boards may not be 
able to meet every month.
  For years, I have supported Credit Unions by supporting their tax-
exempt status in 2004 and 2011.
  In 2012, I recognized and supported the Texas Dow Employees Credit 
Union full-service center, which was an important asset to the 
community.
  Credit unions provide a critical resource to many working families by 
allowing them to have access to our financial system when they might 
otherwise be restricted from such access.
  My constituents and many Americans rely on credit unions as a 
reasonable and trustworthy financial service.
  According to the CUNA (Credit Union National Association), nationally 
there are over 135 million Americans who are members in a credit union.
  In Texas alone, credit unions have 422 credit unions headquartered in 
the state and over 10 million members' total as of 2022.
  If we require credit unions to dedicate resources to meetings instead 
of providing service to their members, we are failing our constituents.
  America's credit unions are a central part of our Nation's financial 
prosperity and must be supported and uplifted through shifting times of 
essential modernization.
  I support this bill and urge my colleagues to join me.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from North Carolina (Mr. McHenry) that the House suspend the 
rules and pass the bill, H.R. 582.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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