H.R.975 - Credit Union Board Modernization Act (119th Congress)
Summary
H.R.975, the Credit Union Board Modernization Act, amends the Federal Credit Union Act to modify the frequency of board of directors meetings. It eliminates the requirement for monthly meetings for all federal credit unions. Instead, it establishes a tiered system based on the credit union's performance and risk profile.
Expected Effects
The bill will likely reduce the administrative burden on well-performing credit unions, allowing them to meet less frequently. Conversely, it maintains stricter meeting schedules for newer or struggling credit unions to ensure closer oversight.
Potential Benefits
- Reduced administrative burden for well-managed credit unions.
- More flexible meeting schedules can lead to more efficient use of board members' time.
- Maintained oversight for de novo and struggling credit unions.
- Potential cost savings for credit unions with reduced meeting frequency.
- Allows boards to focus on strategic planning rather than routine meetings.
Most Benefited Areas:
Potential Disadvantages
- Potential for reduced oversight at credit unions that move to less frequent meetings.
- Risk that less frequent meetings could lead to delayed responses to emerging issues.
- The tiered system may create incentives for credit unions to manipulate their ratings.
- Increased complexity in regulatory compliance.
- Possibility of decreased transparency if meeting minutes are not readily available.
Constitutional Alignment
This bill appears to align with the Constitution, as it falls under Congress's power to regulate commerce and establish laws related to financial institutions. Specifically, Article I, Section 8 grants Congress the power to coin money, regulate the value thereof, and regulate commerce with foreign nations, and among the several states. This power extends to regulating financial institutions like credit unions.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).