Credit Union Board Modernization Act

Floor Speech

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Ms. WATERS. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 6889) to mend the Federal Credit Union Act to modify the frequency of board of directors meetings, and for other purposes, as amended.

The Clerk read the title of the bill.

The text of the bill is as follows: H.R. 6889

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.''. SEC. 3. DETERMINATION OF BUDGETARY EFFECTS.

The budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled ``Budgetary Effects of PAYGO Legislation'' for this Act, submitted for printing in the Congressional Record by the Chairman of the House Budget Committee, provided that such statement has been submitted prior to the vote on passage.

First, I thank the gentleman from California (Mr. Vargas) for offering H.R. 6889, the Credit Union Board Modernization Act.

This bipartisan bill would revise Federal credit union board meeting requirements to bring highly rated Federal credit unions in line with State credit union charter requirements in 17 States, including my home State of California.

Under this bill, Federal credit unions that are highly rated by their regulator, including a highly rated management team, would be required to meet at least six times annually, with at least one meeting held during each fiscal quarter. This would be a reduction from the current requirement to meet monthly.

To ensure stability and mitigate the risk of institutional failure, there are important safeguards included in the bill. For example, de novo or new Federal credit union boards would still be required to meet at least monthly during the first 5 years of receiving a charter, as well as Federal credit unions that have received low exam ratings.

Additionally, if emergencies or issues arise requiring a board meeting, nothing in the bill prevents Federal credit unions from meeting more frequently.

Credit unions and consumer groups support H.R. 6889, including the California and Nevada Credit Union Leagues, Americans for Financial Reform, and Center for Responsible Lending.

Mr. Speaker, I urge Members to support this bill as well, and I reserve the balance of my time.

H.R. 6889 will incentivize Federal credit union boards to ensure their institutions are highly rated and well run in order to reduce the number of board meetings they need to hold.

I therefore urge Members to support H.R. 6889, and I yield back the balance of my time.

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