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NCUA Board Approves Final Member Expulsion Rule

July 2023
NCUA Board Approves Final Member Expulsion Rule

Board Action Bulletin

Midsession Budget Reprograms Funds for Mission Critical Priorities

ALEXANDRIA, Va. (July 20, 2023) – The National Credit Union Administration Board held its seventh open meeting of 2023 and approved a final rule on member expulsion. The NCUA’s Chief Financial Officer also briefed the Board on the agency’s midsession budget, and the Board approved the reprogramming of surplus funds for priority and mission critical areas.

Final Rule Balances Member Rights and Congressional Intent

The NCUA Board unanimously approved a final rule that amends the standard federal credit union bylaws to adopt a policy by which a federal credit union member may be expelled for cause by a two-thirds vote of a quorum of the credit union’s board of directors.

“The final rule we are considering today strikes a balance between addressing the legitimate concerns over providing services to violent and disruptive members and providing due process rights to credit union member-owners. These rights include proper disclosures, hearings, and an appeals process,” NCUA Chairman Todd M. Harper said. “The powers granted in the Credit Union Governance Modernization Act must not be used as a tool to facilitate financial exclusion. What’s more, a federal credit union must ensure its implementation of the authority to expel members for cause is consistent and does not violate anti-discrimination laws or regulations.”

Under the Credit Union Governance Modernization Act of 2022, enacted by Congress on March 15, 2022, the NCUA had until September 15, 2023, to develop a final rule that federal credit unions may adopt to expel a member for cause.

The final rule is effective 30 days after publication in the Federal Register.

Reprogramming of Surplus Funds Supports Cybersecurity Specialists and Chartering Efforts

The Chief Financial Officer reported the NCUA will have an estimated $5.1 million surplus in the agency’s Operating Fund at the end of the year. Approximately one-third of the surplus is attributable to slightly lower-than-projected pay and benefit costs for 2023. Non-payroll categories, including travel, make up the remaining surplus.

The Chief Financial Officer recommended the NCUA Board approve the midsession reprogramming of $737,000 to fund four new cybersecurity support positions and two positions to assist with the NCUA’s field-of-membership and charter-expansion efforts. These reprogrammed funds will also support reasonable accommodations for employees and expenses associated with the background and security investigation for new hires.

The Board unanimously approved this request.

Said Chairman Harper, “These fiscally responsible and mission critical changes in our 2023 budget will ensure the NCUA, the credit union system, and the National Credit Union Share Insurance Fund can continue to adapt to the evolving financial, economic, and market conditions brought on by various external events and pressures, including growing cybersecurity threats and increasing applications for changes in federal credit union’s fields of membership.”

The Chief Financial Officer also reported that no Board action was needed on the capital budget and National Credit Union Share Insurance Fund’s operating budget. Additional information about the agency’s budget and expenses is available at

The NCUA tweets all open Board meetings live. Follow @TheNCUA on Twitter, and access Board Action Memorandums and NCUA rule changes at The NCUA also live streams, archives, and posts videos of open Board meetings online.

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