[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5519 Introduced in House (IH)]
110th CONGRESS
2d Session
H. R. 5519
To advance credit union efforts to promote economic growth, modify
credit union regulatory standards and reduce burdens, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 3, 2008
Mr. Kanjorski (for himself and Mr. Royce) introduced the following
bill; which was referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To advance credit union efforts to promote economic growth, modify
credit union regulatory standards and reduce burdens, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Credit Union
Regulatory Relief Act of 2008''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Investments in securities by Federal credit unions.
Sec. 3. Increase in investment limit in credit union service
organizations.
Sec. 4. Member business loan exclusion for loans to nonprofit religious
organizations.
Sec. 5. Authority of NCUA to establish longer maturities for certain
credit union loans.
Sec. 6. Providing the National Credit Union Administration with greater
flexibility in responding to market
conditions.
Sec. 7. Conversions of certain credit unions to a community charter.
Sec. 8. Credit union participation in the SBA section 504 program.
Sec. 9. Amendments relating to credit union service to underserved
areas.
Sec. 10. Short-term payday loan alternatives within field of
membership.
Sec. 11. Credit union governance.
Sec. 12. Encouraging small business development in underserved urban
and rural communities.
Sec. 13. Exemption from pre-merger notification requirement of the
Clayton Act.
SEC. 2. INVESTMENTS IN SECURITIES BY FEDERAL CREDIT UNIONS.
Section 107 of the Federal Credit Union Act (12 U.S.C. 1757) is
amended--
(1) by striking ``A Federal credit union'' and inserting
``(a) In General.--A Federal credit union''; and
(2) by adding at the end the following new subsection:
``(b) Investment for the Credit Union's Own Account.--
``(1) In general.--In addition to the investments
authorized in subsection (a), a Federal credit union may
purchase and hold for its own account such investment
securities of investment grade as the Board may authorize by
regulation, subject to such limitations and restrictions as the
Board may prescribe in the regulations.
``(2) Percentage limitations.--
``(A) Single obligor.--In no event may the total
amount of investment securities of any single obligor
or maker held by a Federal credit union for the credit
union's own account exceed at any time an amount equal
to 10 percent of the net worth of the credit union.
``(B) Aggregate investments.--In no event may the
aggregate amount of investment securities held by a
Federal credit union for the credit union's own account
exceed at any time an amount equal to 10 percent of the
assets of the credit union.
``(3) Investment security defined.--
``(A) In general.--For purposes of this subsection,
the term `investment security' means marketable
obligations evidencing the indebtedness of any person
in the form of bonds, notes, or debentures and other
instruments commonly referred to as investment
securities.
``(B) Further definition by board.--The Board may
further define the term `investment security'.
``(4) Investment grade defined.--The term `investment
grade' means with respect to an investment security purchased
by a credit union for its own account, an investment security
that at the time of such purchase is rated in one of the 4
highest rating categories by at least 1 nationally recognized
statistical rating organization.
``(5) Clarification of prohibition on stock ownership.--No
provision of this subsection shall be construed as authorizing
a Federal credit union to purchase shares of stock of any
corporation for the credit union's own account, except as
otherwise permitted by law.''.
SEC. 3. INCREASE IN INVESTMENT LIMIT IN CREDIT UNION SERVICE
ORGANIZATIONS.
Section 107(a)(7)(I) of the Federal Credit Union Act (12 U.S.C.
1757(7)(I)) (as so redesignated by section 2(1)) is amended by striking
``up to 1 per centum of the total paid'' and inserting ``up to 3
percent of the total paid''.
SEC. 4. MEMBER BUSINESS LOAN EXCLUSION FOR LOANS TO NONPROFIT RELIGIOUS
ORGANIZATIONS.
Section 107A(a) of the Federal Credit Union Act (12 U.S.C.
1757a(a)) is amended by inserting ``, excluding loans made to nonprofit
religious organizations,'' after ``total amount of such loans''.
SEC. 5. AUTHORITY OF NCUA TO ESTABLISH LONGER MATURITIES FOR CERTAIN
CREDIT UNION LOANS.
Section 107(a)(5) of the Federal Credit Union Act (12 U.S.C.
1757(5)) (as so redesignated by section 2(1)) is amended in the matter
preceding subparagraph (A), by striking ``except as otherwise provided
herein'' and inserting ``or any longer maturity as the Board may allow,
in regulations, except as otherwise provided in this Act''.
SEC. 6. PROVIDING THE NATIONAL CREDIT UNION ADMINISTRATION WITH GREATER
FLEXIBILITY IN RESPONDING TO MARKET CONDITIONS.
Section 107(a)(5)(A)(vi)(I) of the Federal Credit Union Act (12
U.S.C. 1757(5)(A)(vi)(I)) (as so redesignated by section 2(1)) is
amended by striking ``six-month period and that prevailing interest
rate levels'' and inserting ``6-month period or that prevailing
interest rate levels''.
SEC. 7. CONVERSIONS OF CERTAIN CREDIT UNIONS TO A COMMUNITY CHARTER.
Section 109(g) of the Federal Credit Union Act (12 U.S.C. 1759(g))
is amended by inserting after paragraph (2) the following new
paragraph:
``(3) Criteria for continued membership of certain member
groups in community charter conversions.--In the case of a
voluntary conversion of a common-bond credit union described in
paragraph (1) or (2) of subsection (b) into a community credit
union described in subsection (b)(3), the Board shall
prescribe, by regulation, the criteria under which the Board
may determine that a member group or other portion of a credit
union's existing membership, that is located outside the well-
defined local community, neighborhood, or rural district that
shall constitute the community charter, can be satisfactorily
served by the credit union and remain within the community
credit union's field of membership.''.
SEC. 8. CREDIT UNION PARTICIPATION IN THE SBA SECTION 504 PROGRAM.
Section 107(a)(5)(A)(iii) of the Federal Credit Union Act (12
U.S.C. 1757(5)(A)(iii)) (as so redesignated by section 2(1)) is amended
by inserting ``, and applicable regulations,'' after ``specified in the
law''.
SEC. 9. AMENDMENTS RELATING TO CREDIT UNION SERVICE TO UNDERSERVED
AREAS.
(a) In General.--Paragraph (2) of section 109(c) of the Federal
Credit Union Act (12 U.S.C. 1759(c)(2)) is amended to read as follows:
``(2) Exception for underserved areas.--
``(A) In general.--Notwithstanding subsection (b),
the Board may approve an application by a Federal
credit union to allow the membership of such credit
union to include any person or organization whose
principal residence or place of business is located
within a local community, neighborhood, or rural
district if--
``(i) the Board determines--
``(I) at any time after August 7,
1998, that all of the local community,
neighborhood, or rural district taken
into account for purposes of this
paragraph is an underserved area (as
defined in section 101(10)); and
``(II) at the time of such
approval, that the credit union is well
capitalized or adequately capitalized
(as defined in section 216(c)(1)); and
``(ii) before the end of the 24-month
period beginning on the date of such approval,
the credit union has established and maintains
an office or facility in the local community,
neighborhood, or rural district at which credit
union services are available.
``(B) Termination of approval.--Any failure of a
Federal credit union to meet the requirement of clause
(ii) of subparagraph (A) by the end of the 24-month
period referred to in such clause shall constitute a
termination, as a matter of law, of any approval of an
application under this paragraph by the Board with
respect to the membership of such credit union.
``(C) Annual credit union reporting requirement.--
Any Federal credit union which has an application
approved under this paragraph shall submit an annual
report to the Administration on the number of members
of the credit union who are members by reason of such
application and the number of offices or facilities
maintained by the credit union in the local community,
neighborhood, or rural district taken into account by
the Board in approving such application.
``(D) Publication by administration.--The
Administration shall publish annually a report
containing--
``(i) a list of all the applications
approved under this paragraph prior to the
publication of the report;
``(ii) the number and locations of the
underserved areas taken into account in
approving such applications; and
``(iii) the total number of members of
credit unions who are members by reason of the
approval of such applications.''.
(b) Underserved Area Defined.--Section 101 of the Federal Credit
Union Act (12 U.S.C. 1752) is amended--
(1) by striking ``and'' at the end of paragraph (8);
(2) by striking the period at the end of paragraph (9) and
inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(10) the term `underserved area' means a geographic area
consisting of a single census tract or a group of census
tracts, each of which meets the criteria for--
``(A) a low income community, as defined in section
45D(e) of the Internal Revenue Code of 1986; or
``(B) an investment area, as defined and designated
under section 103(16) of the Community Development
Banking and Financial Institutions Act of 1994.''.
SEC. 10. SHORT-TERM PAYDAY LOAN ALTERNATIVES WITHIN FIELD OF
MEMBERSHIP.
Section 107(a)(12)(B) of the Federal Credit Union Act (12 U.S.C.
1757(12)(B)) (as so redesignated by section 2(1)) is amended by
inserting ``and provide short-term loans as an alternative to payday
loans'' after ``domestic electronic fund transfers''.
SEC. 11. CREDIT UNION GOVERNANCE.
(a) Expulsion of Members for Just Cause.--Subsection (b) of section
118 of the Federal Credit Union Act (12 U.S.C. 1764(b)) is amended to
read as follows:
``(b) Policy and Actions of Boards of Directors of Federal Credit
Unions.--
``(1) Expulsion of members for nonparticipation or for just
cause.--The board of directors of a Federal credit union may,
by majority vote of a quorum of directors, adopt and enforce a
policy with respect to expulsion from membership, by a majority
vote of such board of directors, based on just cause, including
disruption of credit union operations, or on nonparticipation
by a member in the affairs of the credit union.
``(2) Written notice of policy to members.--If a policy
described in paragraph (1) is adopted, written notice of the
policy as adopted and the effective date of such policy shall
be provided to--
``(A) each existing member of the credit union not
less than 30 days prior to the effective date of such
policy; and
``(B) each new member prior to or upon applying for
membership.''.
(b) Term Limits Authorized for Board Members of Federal Credit
Unions.--Section 111(a) of the Federal Credit Union Act (12 U.S.C.
1761(a)) is amended by adding at the end the following new sentence:
``The bylaws of a Federal credit union may limit the number of
consecutive terms any person may serve on the board of directors of
such credit union.''.
SEC. 12. ENCOURAGING SMALL BUSINESS DEVELOPMENT IN UNDERSERVED URBAN
AND RURAL COMMUNITIES.
Section 107A(c)(1)(B) of the Federal Credit Union Act (12 U.S.C.
1757a(c)(1)(B)) is amended--
(1) by striking ``or'' after the semicolon at the end of
clause (iv);
(2) by redesignating clause (v) as clause (vi); and
(3) by inserting after clause (iv) the following new
clause:
``(v) that is made to a member, the
proceeds of which are to be used for
commercial, corporate, business, farm or
agricultural purposes in an underserved area if
such extension of credit--
``(I) is made to a person or
organization whose principal residence
or place of business is located within
an underserved area (as defined in
section 101(10)) served by the credit
union; or
``(II) is secured by real property
located within, or is intended to
operate as part of a business located
within, such underserved area; or''.
SEC. 13. EXEMPTION FROM PRE-MERGER NOTIFICATION REQUIREMENT OF THE
CLAYTON ACT.
Section 7A(c)(7) of the Clayton Act (15 U.S.C. 18a(c)(7)) is
amended by inserting ``section 205(b)(3) of the Federal Credit Union
Act (12 U.S.C. 1785(b)(3)),'' before ``or section 3''.
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