Credit Union Governance Modernization Act becomes law

The Credit Union Governance Modernization Act became law as part of the $1.5 trillion omnibus spending package signed by President Biden this week.

Initially introduced by Reps. Tom Emmer, R-Minn., and Ed Perlmutter, D-Colo., in April of last year, the act grants credit unions the ability to expel members who commit fraud, verbally or physically abuse branch staff or other members, lead the institution to suffer a material loss or engage in other improper conduct. Such changes can boost the overall safety at branches, advocates of the measure have said.

The act was backed by credit union trade organizations such as the Credit Union National Association.

“This commonsense bill will allow credit unions to ensure the safety of their branches, employees and members, keeping resources focused on improving consumers’ financial well-being,” Jim Nussle, CUNA's president and chief executive, said in a press release.

The omnibus package also included legislation that provided substitute interest rates for loans, securities and other instruments that would normally depend on the London interbank offered rate, as well as $295 million in funding for the Treasury Department’s Community Development Financial Institutions Fund.

“We can all agree that Americans should have access to safe and reliable financial services,” Emmer said in the release. “Federal credit unions must have a streamlined process for removing dangerous members from the credit union. We must prioritize a financial system that keeps Americans safe.”