12 U.S.C. § 1764 — Expulsion and withdrawal

(a) Unless (b) or (c) applies, members present at a special meeting may expel a member by two-thirds vote, but only after giving the member a chance to be heard. (b) The board may, by majority vote of a quorum, adopt and enforce an expulsion policy based on nonparticipation. It should consider failure to vote in annual elections or to buy shares from, borrow from, or lend to the credit union. The credit union must mail each member the policy and effective date at least 30 days beforehand, and must give new members written notice before or upon applying. (c)(1) Except as (a) and (b) provide, a member may be expelled for “cause” by two-thirds of a directors’ quorum under a policy the National Credit Union Administration Board must adopt by rulemaking within 18 months after March 15, 2022. (2) The credit union must give every member a written or electronic copy of the policy before using it. (3)(A) A member facing expulsion must receive advance notice and the reason, in person, by mail, or electronically if elected. (B)(i) The member has 60 days after receipt to request a board hearing. (ii) Without a request, expulsion occurs after 60 days. (C) After a timely request, the board must hold a hearing and timely vote. (D) The credit union must give notice of expulsion in person, by mail, or, if elected, electronically. (4)(A) An expelled member must be allowed to request reinstatement, which may be granted by a majority of a directors’ quorum or a majority of members present at a meeting. (B) The member need not be allowed to attend that meeting in person. (5) “Cause” means a substantial or repeated membership-agreement violation; substantial or repeated operational disruption, including dangerous or abusive behavior as defined by the Board’s rulemaking; or fraud, attempted fraud, or other illegal conduct for which the member was convicted in relation to the credit union or its employees’ business. (d) Withdrawal or expulsion under (a), (b), or (c) does not remove liability to the credit union. The bylaws determine how the amount payable to the withdrawing or expelled member is determined and paid. (e) Expulsion must be individual and case by case. The Board and Federal credit unions may not expel a class of members.