HR 5519 IHCommentsClose CommentsPermalink

To advance credit union efforts to promote economic growth, modify credit union regulatory standards and reduce burdens, and for other purposes.CommentsClose CommentsPermalink

March 3, 2008

Mr. KANJORSKI (for himself and Mr. ROYCE) introduced the following bill; which was referred to the Committee on Financial ServicesCommentsClose CommentsPermalink

To advance credit union efforts to promote economic growth, modify credit union regulatory standards and reduce burdens, and for other purposes.CommentsClose CommentsPermalink

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the `Credit Union Regulatory Relief Act of 2008'.CommentsClose CommentsPermalink





(b) Table of Contents- The table of contents for this Act is as follows:CommentsClose CommentsPermalink





Sec. 1. Short title; table of contents.CommentsClose CommentsPermalink





Sec. 2. Investments in securities by Federal credit unions.CommentsClose CommentsPermalink





Sec. 3. Increase in investment limit in credit union service organizations.CommentsClose CommentsPermalink





Sec. 4. Member business loan exclusion for loans to nonprofit religious organizations.CommentsClose CommentsPermalink





Sec. 5. Authority of NCUA to establish longer maturities for certain credit union loans.CommentsClose CommentsPermalink





Sec. 6. Providing the National Credit Union Administration with greater flexibility in responding to market conditions.CommentsClose CommentsPermalink





Sec. 7. Conversions of certain credit unions to a community charter.CommentsClose CommentsPermalink





Sec. 8. Credit union participation in the SBA section 504 program.CommentsClose CommentsPermalink





Sec. 9. Amendments relating to credit union service to underserved areas.CommentsClose CommentsPermalink





Sec. 10. Short-term payday loan alternatives within field of membership.CommentsClose CommentsPermalink





Sec. 11. Credit union governance.CommentsClose CommentsPermalink





Sec. 12. Encouraging small business development in underserved urban and rural communities.CommentsClose CommentsPermalink





Sec. 13. Exemption from pre-merger notification requirement of the Clayton Act.CommentsClose CommentsPermalink

SEC. 2. INVESTMENTS IN SECURITIES BY FEDERAL CREDIT UNIONS.

Section 107 of the Federal Credit Union Act (12 U.S.C. 1757) is amended--CommentsClose CommentsPermalink





(1) by striking `A Federal credit union' and inserting `(a) In General- A Federal credit union'; andCommentsClose CommentsPermalink





(2) by adding at the end the following new subsection:CommentsClose CommentsPermalink





`(b) Investment for the Credit Union's Own Account-CommentsClose CommentsPermalink





`(1) IN GENERAL- In addition to the investments authorized in subsection (a), a Federal credit union may purchase and hold for its own account such investment securities of investment grade as the Board may authorize by regulation, subject to such limitations and restrictions as the Board may prescribe in the regulations.CommentsClose CommentsPermalink





`(2) PERCENTAGE LIMITATIONS-CommentsClose CommentsPermalink





`(A) SINGLE OBLIGOR- In no event may the total amount of investment securities of any single obligor or maker held by a Federal credit union for the credit union's own account exceed at any time an amount equal to 10 percent of the net worth of the credit union.CommentsClose CommentsPermalink





`(B) AGGREGATE INVESTMENTS- In no event may the aggregate amount of investment securities held by a Federal credit union for the credit union's own account exceed at any time an amount equal to 10 percent of the assets of the credit union.CommentsClose CommentsPermalink





`(3) INVESTMENT SECURITY DEFINED-CommentsClose CommentsPermalink





`(A) IN GENERAL- For purposes of this subsection, the term `investment security' means marketable obligations evidencing the indebtedness of any person in the form of bonds, notes, or debentures and other instruments commonly referred to as investment securities.CommentsClose CommentsPermalink





`(B) FURTHER DEFINITION BY BOARD- The Board may further define the term `investment security'.CommentsClose CommentsPermalink





`(4) INVESTMENT GRADE DEFINED- The term `investment grade' means with respect to an investment security purchased by a credit union for its own account, an investment security that at the time of such purchase is rated in one of the 4 highest rating categories by at least 1 nationally recognized statistical rating organization.CommentsClose CommentsPermalink





`(5) CLARIFICATION OF PROHIBITION ON STOCK OWNERSHIP- No provision of this subsection shall be construed as authorizing a Federal credit union to purchase shares of stock of any corporation for the credit union's own account, except as otherwise permitted by law.'.CommentsClose CommentsPermalink

SEC. 3. INCREASE IN INVESTMENT LIMIT IN CREDIT UNION SERVICE ORGANIZATIONS.

Section 107(a)(7)(I) of the Federal Credit Union Act (12 U.S.C. 1757(7)(I)) (as so redesignated by section 2(1)) is amended by striking `up to 1 per centum of the total paid' and inserting `up to 3 percent of the total paid'.CommentsClose CommentsPermalink

SEC. 4. MEMBER BUSINESS LOAN EXCLUSION FOR LOANS TO NONPROFIT RELIGIOUS ORGANIZATIONS.

Section 107A(a) of the Federal Credit Union Act (12 U.S.C. 1757a(a)) is amended by inserting `, excluding loans made to nonprofit religious organizations,' after `total amount of such loans'.CommentsClose CommentsPermalink

SEC. 5. AUTHORITY OF NCUA TO ESTABLISH LONGER MATURITIES FOR CERTAIN CREDIT UNION LOANS.

Section 107(a)(5) of the Federal Credit Union Act (12 U.S.C. 1757(5)) (as so redesignated by section 2(1)) is amended in the matter preceding subparagraph (A), by striking `except as otherwise provided herein' and inserting `or any longer maturity as the Board may allow, in regulations, except as otherwise provided in this Act'.CommentsClose CommentsPermalink

SEC. 6. PROVIDING THE NATIONAL CREDIT UNION ADMINISTRATION WITH GREATER FLEXIBILITY IN RESPONDING TO MARKET CONDITIONS.

Section 107(a)(5)(A)(vi)(I) of the Federal Credit Union Act (12 U.S.C. 1757(5)(A)(vi)(I)) (as so redesignated by section 2(1)) is amended by striking `six-month period and that prevailing interest rate levels' and inserting `6-month period or that prevailing interest rate levels'.CommentsClose CommentsPermalink

SEC. 7. CONVERSIONS OF CERTAIN CREDIT UNIONS TO A COMMUNITY CHARTER.

Section 109(g) of the Federal Credit Union Act (12 U.S.C. 1759(g)) is amended by inserting after paragraph (2) the following new paragraph:CommentsClose CommentsPermalink





`(3) CRITERIA FOR CONTINUED MEMBERSHIP OF CERTAIN MEMBER GROUPS IN COMMUNITY CHARTER CONVERSIONS- In the case of a voluntary conversion of a common-bond credit union described in paragraph (1) or (2) of subsection (b) into a community credit union described in subsection (b)(3), the Board shall prescribe, by regulation, the criteria under which the Board may determine that a member group or other portion of a credit union's existing membership, that is located outside the well-defined local community, neighborhood, or rural district that shall constitute the community charter, can be satisfactorily served by the credit union and remain within the community credit union's field of membership.'.CommentsClose CommentsPermalink

SEC. 8. CREDIT UNION PARTICIPATION IN THE SBA SECTION 504 PROGRAM.

Section 107(a)(5)(A)(iii) of the Federal Credit Union Act (12 U.S.C. 1757(5)(A)(iii)) (as so redesignated by section 2(1)) is amended by inserting `, and applicable regulations,' after `specified in the law'.CommentsClose CommentsPermalink

SEC. 9. AMENDMENTS RELATING TO CREDIT UNION SERVICE TO UNDERSERVED AREAS.

(a) In General- Paragraph (2) of section 109(c) of the Federal Credit Union Act (12 U.S.C. 1759(c)(2)) is amended to read as follows:CommentsClose CommentsPermalink





`(2) EXCEPTION FOR UNDERSERVED AREAS-CommentsClose CommentsPermalink





`(A) IN GENERAL- Notwithstanding subsection (b), the Board may approve an application by a Federal credit union to allow the membership of such credit union to include any person or organization whose principal residence or place of business is located within a local community, neighborhood, or rural district if--CommentsClose CommentsPermalink





`(i) the Board determines--CommentsClose CommentsPermalink





`(I) at any time after August 7, 1998, that all of the local community, neighborhood, or rural district taken into account for purposes of this paragraph is an underserved area (as defined in section 101(10)); andCommentsClose CommentsPermalink





`(II) at the time of such approval, that the credit union is well capitalized or adequately capitalized (as defined in section 216(c)(1)); andCommentsClose CommentsPermalink





`(ii) before the end of the 24-month period beginning on the date of such approval, the credit union has established and maintains an office or facility in the local community, neighborhood, or rural district at which credit union services are available.CommentsClose CommentsPermalink





`(B) TERMINATION OF APPROVAL- Any failure of a Federal credit union to meet the requirement of clause (ii) of subparagraph (A) by the end of the 24-month period referred to in such clause shall constitute a termination, as a matter of law, of any approval of an application under this paragraph by the Board with respect to the membership of such credit union.CommentsClose CommentsPermalink





`(C) ANNUAL CREDIT UNION REPORTING REQUIREMENT- Any Federal credit union which has an application approved under this paragraph shall submit an annual report to the Administration on the number of members of the credit union who are members by reason of such application and the number of offices or facilities maintained by the credit union in the local community, neighborhood, or rural district taken into account by the Board in approving such application.CommentsClose CommentsPermalink





`(D) PUBLICATION BY ADMINISTRATION- The Administration shall publish annually a report containing--CommentsClose CommentsPermalink





`(i) a list of all the applications approved under this paragraph prior to the publication of the report;CommentsClose CommentsPermalink





`(ii) the number and locations of the underserved areas taken into account in approving such applications; andCommentsClose CommentsPermalink





`(iii) the total number of members of credit unions who are members by reason of the approval of such applications.'.CommentsClose CommentsPermalink





(b) Underserved Area Defined- Section 101 of the Federal Credit Union Act (12 U.S.C. 1752) is amended--CommentsClose CommentsPermalink





(1) by striking `and' at the end of paragraph (8);CommentsClose CommentsPermalink





(2) by striking the period at the end of paragraph (9) and inserting `; and'; andCommentsClose CommentsPermalink





(3) by adding at the end the following new paragraph:CommentsClose CommentsPermalink





`(10) the term `underserved area' means a geographic area consisting of a single census tract or a group of census tracts, each of which meets the criteria for--CommentsClose CommentsPermalink





`(A) a low income community, as defined in section 45D(e) of the Internal Revenue Code of 1986; orCommentsClose CommentsPermalink





`(B) an investment area, as defined and designated under section 103(16) of the Community Development Banking and Financial Institutions Act of 1994.'.CommentsClose CommentsPermalink

SEC. 10. SHORT-TERM PAYDAY LOAN ALTERNATIVES WITHIN FIELD OF MEMBERSHIP.

Section 107(a)(12)(B) of the Federal Credit Union Act (12 U.S.C. 1757(12)(B)) (as so redesignated by section 2(1)) is amended by inserting `and provide short-term loans as an alternative to payday loans' after `domestic electronic fund transfers'.CommentsClose CommentsPermalink

SEC. 11. CREDIT UNION GOVERNANCE.

(a) Expulsion of Members for Just Cause- Subsection (b) of section 118 of the Federal Credit Union Act (12 U.S.C. 1764(b)) is amended to read as follows:CommentsClose CommentsPermalink





`(b) Policy and Actions of Boards of Directors of Federal Credit Unions-CommentsClose CommentsPermalink





`(1) EXPULSION OF MEMBERS FOR NONPARTICIPATION OR FOR JUST CAUSE- The board of directors of a Federal credit union may, by majority vote of a quorum of directors, adopt and enforce a policy with respect to expulsion from membership, by a majority vote of such board of directors, based on just cause, including disruption of credit union operations, or on nonparticipation by a member in the affairs of the credit union.CommentsClose CommentsPermalink





`(2) WRITTEN NOTICE OF POLICY TO MEMBERS- If a policy described in paragraph (1) is adopted, written notice of the policy as adopted and the effective date of such policy shall be provided to--CommentsClose CommentsPermalink





`(A) each existing member of the credit union not less than 30 days prior to the effective date of such policy; andCommentsClose CommentsPermalink





`(B) each new member prior to or upon applying for membership.'.CommentsClose CommentsPermalink





(b) Term Limits Authorized for Board Members of Federal Credit Unions- Section 111(a) of the Federal Credit Union Act (12 U.S.C. 1761(a)) is amended by adding at the end the following new sentence: `The bylaws of a Federal credit union may limit the number of consecutive terms any person may serve on the board of directors of such credit union.'.CommentsClose CommentsPermalink

SEC. 12. ENCOURAGING SMALL BUSINESS DEVELOPMENT IN UNDERSERVED URBAN AND RURAL COMMUNITIES.

Section 107A(c)(1)(B) of the Federal Credit Union Act (12 U.S.C. 1757a(c)(1)(B)) is amended--CommentsClose CommentsPermalink





(1) by striking `or' after the semicolon at the end of clause (iv);CommentsClose CommentsPermalink





(2) by redesignating clause (v) as clause (vi); andCommentsClose CommentsPermalink





(3) by inserting after clause (iv) the following new clause:CommentsClose CommentsPermalink





`(v) that is made to a member, the proceeds of which are to be used for commercial, corporate, business, farm or agricultural purposes in an underserved area if such extension of credit--CommentsClose CommentsPermalink





`(I) is made to a person or organization whose principal residence or place of business is located within an underserved area (as defined in section 101(10)) served by the credit union; orCommentsClose CommentsPermalink





`(II) is secured by real property located within, or is intended to operate as part of a business located within, such underserved area; or'.CommentsClose CommentsPermalink

SEC. 13. EXEMPTION FROM PRE-MERGER NOTIFICATION REQUIREMENT OF THE CLAYTON ACT.

Section 7A(c)(7) of the Clayton Act (15 U.S.C. 18a(c)(7)) is amended by inserting `section 205(b)(3) of the Federal Credit Union Act (12 U.S.C. 1785(b)(3)),' before `or section 3'.CommentsClose CommentsPermalink