§1764 Expulsion and Withdrawal

Summary

Members can be removed from a Federal credit union in a few ways. Other members can vote someone out by a two-thirds vote at a special meeting held for that purpose, after the person is allowed to speak. The board of directors can also make a rule, by a majority vote of a quorum, to drop members who do not participate (for example, who do not vote, buy shares, get loans, or lend). If the board makes that rule, it must mail written notice to every member at least 30 days before the rule starts and tell new members about it before or when they join. A member can also be expelled for cause under a policy the National Credit Union Administration must write within 18 months after March 15, 2022. A credit union may not use that policy unless it gives every member a copy in writing or electronically. Before expulsion the member must be told the reason in person, by mail, or electronically. The member then has 60 days to ask for a hearing. If no hearing is requested, the member is expelled after 60 days. If a hearing is requested, the board must hold it and then vote. The member will be told of any expulsion in the same ways. An expelled member may ask to be reinstated and can be put back by a majority vote of a quorum of the board or by a majority of members at a meeting (the expelled person is not automatically allowed to attend that meeting). “Cause” means major or repeated violations of the membership agreement, serious or repeated disruptions (including dangerous or abusive acts as the NCUA defines), or fraud or other illegal acts tied to the credit union. Leaving or being expelled does not remove any debt to the credit union. Payments owed are handled as the bylaws say. Expulsions must be done individually, not by removing a whole class of members.