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NCUA Board Member Rodney E. Hood Statement on the Member Expulsion Proposed Rule

September 2022
NCUA Board Member Rodney E. Hood Statement on the Member Expulsion Proposed Rule

As Prepared for Delivery on September 22, 2022

In March 2022, Congress enacted the Governance Modernization Act to revise the Federal Credit Union Act procedures for expelling members. The legislative history of the Governance Modernization Act focused on FCUs’ concerns about their ability to address violent and aggressive behaviors of certain members. I have to tell you some of the stories I have heard, although rare, are very troubling when it comes to violent and aggressive behaviors. I can think of one specific example that occurred at a Tennessee credit union.

Today’s proposed rulemaking notes that the NCUA Board is focused on improving access to financial services, in part, through its Advancing Communities through Credit, Education, Stability and Support (ACCESS) initiative. As part of this initiative, the NCUA is working to expand the availability of credit to stimulate economic growth and improve the financial well-being of all Americans. The rule makes it clear that the Board believes that the expulsion of members is an extreme remedy that may have the effect of denying individuals access to financial services so the authority under the Governance Modernization Act and codified in today’s proposed rule should be rare and should be reserved for extremely egregious behavior.

I will be supporting today’s proposed rule but I do have one question: do any state chartered credit unions currently have the authority to expel members?

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