[Congressional Record Volume 171, Number 27 (Monday, February 10, 2025)]
[House]
[Pages H601-H603]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CREDIT UNION BOARD MODERNIZATION ACT
Mr. HILL of Arkansas. Mr. Speaker, I move to suspend the rules and
pass the bill (H.R. 975) 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. 975
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'';
[[Page H602]]
(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
Arkansas (Mr. Hill) and the gentleman from California (Mr. Vargas) each
will control 20 minutes.
The Chair recognizes the gentleman from Arkansas.
General Leave
Mr. HILL of Arkansas. 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 Arkansas?
There was no objection.
Mr. HILL of Arkansas. Mr. Speaker, I yield myself such time as I may
consume.
{time} 1715
Mr. HILL of Arkansas. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in strong support of H.R. 975, the Credit Union
Board Modernization Act.
I applaud my Committee on Financial Services colleagues,
Representatives Vargas and Huizenga, for introducing it. This
bipartisan bill will help focus credit unions' time and resources where
it really matters, which is serving their members.
Federal credit unions are governed by boards of directors who are
currently required by law, Mr. Speaker, to meet at least once a month.
This outdated requirement prevents credit unions from attracting
talented volunteers and professionals to a credit union's board due to
the time commitment of a monthly board meeting.
Under H.R. 975, certain well-functioning credit unions are provided
with the option to meet at least six times annually with at least one
meeting held during each fiscal quarter of the year.
This crucial change frees up the time and resources used for meetings
to put toward the critical mission of providing financial services to
their credit union members. Importantly, this bill has guardrails to
ensure the safety and soundness of our financial system. Only credit
unions with a CAMELS composite rating of a one or two will be permitted
to meet at this less frequent rate.
All credit unions, just like commercial banks, are subject to a
supervisory rating scale. It is called the CAMELS rating. A credit
union is assessed at each of the six categories under that acronym, and
they are assigned a composite rating on a scale of one, the best, to
five, the worst, based on: capital adequacy, asset quality, management,
earnings, liquidity, and sensitivity to market risk, hence the acronym
CAMELS.
Therefore, this bill provides an incentive to achieve the strongest
supervisory rating so that a credit union might access the flexibility
offered by this bill.
Furthermore, by reducing the mandated number of board meetings for
federally chartered credit unions, this legislation would promote
parity between Federal and State-chartered credit unions as 17 States
currently allow for meetings less frequently than monthly.
As I say, fewer mandated board meetings are especially helpful for
rural credit unions who struggle to attract talent to their boards and
also operate with significant regulatory burden and sometimes long
travel. Of course, nothing in this legislation prevents credit union
boards from meeting more frequently if they determine that is
necessary.
Credit unions play an essential role in our communities across this
country, and H.R. 975 will ensure that they are able to operate more
efficiently. I thank the gentleman from California's 52nd District, Mr.
Vargas, for introducing this important bipartisan bill.
Mr. Speaker, I encourage all of my colleagues to support it, and I
reserve the balance of my time.
Mr. VARGAS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I thank Chairman Hill and Ranking Member Waters for
their support throughout this process.
Mr. Speaker, I rise in support of H.R. 975, the Credit Union Board
Modernization Act. Credit unions are a vital part of our country's
economic stability and success. These not-for-profit, member-owned
institutions serve over 140 million Americans. Yet for over 40 years,
volunteer-led Federal credit union boards have been burdened by an
unnecessary requirement on meeting frequency.
This bill gives financially sound and well-managed Federal credit
unions the flexibility they deserve. It will adjust the board meeting
requirement by allowing qualifying Federal credit unions to move from
the current monthly meeting to meeting a minimum of six times annually
with at least one meeting each fiscal quarter.
This is a commonsense fix that allows Federal credit unions with a
proven record of stability to dedicate more time and resources to the
local communities they serve, like in San Diego, my hometown, and
across the country.
This fix also makes it easier for more Americans who currently are
not able to serve on these boards, due to the time commitment, to have
an opportunity to bring their perspectives to the table. This bill
contains key safeguards to ensure stability and mitigate risk.
Newly formed credit unions and those with poor ratings, as Mr. Hill
stated, will still be held to the current monthly meeting requirements.
Under this bill, only Federal credit unions with strong ratings from
our Federal regulators and proven management capacities and
capabilities will be eligible for the new meeting requirements. This
reasonable bipartisan bill passed the House twice in both the 117th and
118th Congresses.
Again, I thank my colleague, the gentleman from Michigan (Mr.
Huizenga) for working with me on advancing this legislation and his
deep knowledge of the issues. It was actually a pleasure working with
him again.
Mr. Speaker, I urge all of my colleagues to support this bill, and I
reserve the balance of my time.
Mr. HILL of Arkansas. Mr. Speaker, I yield 2 minutes to the
gentlewoman from California (Mrs. Kim).
Mrs. KIM. Mr. Speaker, I thank Chairman Hill for yielding.
Mr. Speaker, I rise in strong support of H.R. 975, the Credit Union
Board Modernization Act. I also want to stand up and echo and reiterate
the points that I already addressed because this legislation is so
important.
This bill would amend the Federal Credit Union Act to revise the
frequency of the board meetings a federally chartered credit union must
hold. Under current law, credit union boards must meet once per month,
but this bill, H.R. 975, would allow credit unions to lower that
threshold of required meetings to six per year.
This bipartisan bill is needed to increase flexibility and unlock
more resources for credit unions to better serve their members and our
communities.
Additionally, H.R. 975 creates an incentive for credit unions to
improve their management ratings by decreasing the number of board
meetings for those that have the best management ratings. On the other
hand, credit unions that are poorly managed or are new Federal credit
unions will still be required to meet on a monthly basis.
I commend my colleagues, Representatives Huizenga and Vargas, for
reintroducing this commonsense piece of legislation, and I urge my
colleagues to support H.R. 975 and eliminate burdensome regulations to
let credit
[[Page H603]]
unions do what they do best, which is to service their communities.
As you heard, this has been passed in the 117th and 118th Congresses.
I think it is time to bring this home, and let's get this done this
Congress.
Mr. HILL of Arkansas. Mr. Speaker, I reserve the balance of my time.
Mr. VARGAS. Mr. Speaker, credit unions are vital to our economy and
to our communities. I urge my colleagues to support this bill and the
consumers and small businesses that they serve.
Mr. Speaker, I yield back the balance of my time.
Mr. HILL of Arkansas. Mr. Speaker, I urge all my colleagues to
support H.R. 975. I appreciate Mr. Vargas sponsoring this good bill and
Mrs. Kim speaking on it. They represent the State of California, and
the State of California has some of the largest Federal credit unions
active and headquartered in their State.
This will be a great service to those credit unions particularly and
their home State of California to be able to focus on their members and
have a few less meetings. I thank the gentleman from California for his
sponsorship.
Mr. Speaker, I urge a ``yes'' vote, and I yield back the balance of
my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Arkansas (Mr. Hill) that the House suspend the rules and
pass the bill, H.R. 975.
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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