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

As Prepared for Delivery on July 20, 2023

In March 2022, Congress enacted the Credit Union Governance Modernization Act to revise the Federal Credit Union Act procedures for expelling members. The legislative history of the Governance Modernization Act focused on federal credit unions’ concerns about their ability to address the violent and aggressive behaviors of certain members. I have to tell you all some of the stories I’ve heard, although rare, are very troubling when it comes to violent and aggressive behaviors.

I’m reminded of one credit union CEO in Tennessee who had some very disturbing experiences with one of the members. So, the fact that we’re even have to have a rule of this making just really is troubling just because, again, some of the stories.

Today’s final rulemaking notes the 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. This work also aims to ensure that the credit union system achieves its statutory mission of meeting the credit and savings needs of people, especially those of modest means.

Let me be clear, the expulsion of members is an extreme remedy that may have the effect of denying individuals access to financial services. In addition, as financial cooperatives, a credit union’s expulsion of a member-owner is a particularly significant action resulting in financial exclusion. Therefore, consistent with certain statements in the legislative history, the use of the authority under the Governance Modernization Act should be rare and used only for egregious member behavior.

Mr. Chairman, I have no questions and will be supporting today’s final rule.