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A Direct Line Blog

Member Expulsion Rule Coming, Eventually

May 11, 2022 7:30 am

By Donya Parrish, MCU VP- Risk Management

When the Credit Union Governance Modernization Act was signed into law in March, there was rejoicing in its provision that allows federal credit unions to expel certain members, especially those who exhibit abusive behaviors to your credit union’s employees. If you are wondering how you do that and when you can start, the answer is: not so fast.
As noted in CUNA’s recent blog**, NCUA is required to write a policy on member expulsion and has 18 months to do so. While we wait for that, your credit union still has a right to limit services to those who violate your board-approved policy on handling difficult and disruptive members.
NCUA explains limitation of services in their 2020 model bylaws with commentary noting that violent, belligerent, disruptive, or abusive activities, may include the following:
  1. Violence, intimidation, threats, harassment, or physical or verbal abuse of duly elected or appointed officials or employees of the credit union, members, or agents of the credit union. This includes actions while on credit union premises and through use of telephone, mail, email or other electronic method.
  2. Causes or threatens damage to credit union property.
  3. Unauthorized use or access of credit union property.
  4. Knowingly disseminating incorrect, misleading, confidential, or proprietary information regarding the credit union.
  5. Any actions that may cause material risk or financial harm to the credit union.
A credit union may limit services for violent, belligerent, disruptive, or abusive activities only if there is a logical relationship between the objectionable activities and the services to be suspended. In the event of a suspension of service, the member needs to be notified of what accounts or services have been discontinued.
We’ll keep you posted as the NCUA member expulsion policy is proposed and when it will become effective. Don’t hesitate to reach out if you have questions in the meantime.
**The blog is located on CUNA’s Compliance Community and does require access there. If you are not a member of that online community, just send me a note and I will share it with you.

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