First Legacy Community Credit Union
Member Expulsion Policy
POLICY GOES INTO EFFECT OCTOBER 1, 2011
In the interest of protecting the assets of First Legacy Community Credit Union (FLCCU) and maximizing dividends to members, the board of directors adopts the following policy. This policy provides for expulsion of members who have caused FLCCU a loss or who have engaged in actions that put the credit union at risk of loss or liability. Members can be expelled without a special meeting, for "non-participation in the affairs of the credit union". Section 118(b) of the Federal Credit Union Act provides that a credit union board of directors may adopt a policy of Membership Expulsion. If such a policy is adopted, written notice of the policy and effective date of the policy must be mailed to each member at least 30 days prior to the effective date. Additionally, each new member must receive a copy of the policy when applying for membership.
Expulsion may result, upon board action, in the situations described below.
Members not participating in the affairs of the credit union such as:
- Failure to vote at the annual meeting
- Failure to purchase shares
- Failure to maintain the minimum par value ($20) in the credit union
Member-caused loss that may subject the member to expulsion action by the board of directors includes the following:
- A members’ failure to pay amounts due under a loan. "Amounts due" include, without limitation: principal: interest; fees and charges; financed insurance premiums; collection agency charges or attorney's fee incurred in collecting amounts due under a note or guarantee, in repossessing and liquidating collateral under a security agreement, or in obtaining a deficiency judgment.
- A member who files bankruptcy, but signs an enforceable reaffirmation agreement or otherwise voluntarily makes arrangements to repay all amounts due, will remain eligible for membership.
- A member's failure to provide collected funds to cover share account withdrawals or to cover personal share drafts.
- A member's failure to provide collected funds to cover Credit Union drafts purchased by the member.
- A member's failure to pay fees or charges due the Credit Union for any reason.
- A member, not withstanding the foregoing, who has caused a loss (due to bankruptcy) but, in the sole discretion of the management of the Credit Union, establishes that the loss was unavoidable and the result of extraordinary hardship resulting from: loss of job, serious family illness, dissolution of marriage, or death in the immediate family, will remain eligible for membership.
Member actions that put the credit union at risk of loss or liability that may subject the member to expulsion action by the board include the following:
- Members who engage in check kiting, attempted or actual deposits of counterfeit checks or other non-negotiable items, foreign ATM transfers between checking and savings accounts which result in overdrafts of both accounts, attempted or actual theft of credit union or other members funds, or similar activities whereby the member illegally attempts to obtain funds not due the member.
- Members threatening staff who deny loan applications or other services, members who engage in inappropriate conduct or language directed at staff based on sex, race, national origin, marital status, sexual orientation, physical or mental impairment, age, or membership in the uniformed services, or similar activity whereby staff are subjected to verbal or physical abuse.
- Members who fail to protect blank personal checks as evidenced by repeated claims of lost checks and unauthorized transactions (particularly when the forgeries are committed by persons living in the members household), or engage in similar activities resulting from repeated failure to keep their accounts and records secure.
Notice to Current Members
The expulsion criteria will be communicated to all current members via website, newsletter, and handouts provided at all branches.
Notice to New Members
The expulsion criteria will be communicated to new members at the time of application, as of the date of mailing the notice to current members.
In the event a member causes a loss to the credit union that meets the Expulsion Criteria, the board of directors may expel the member in accordance with the following procedure:
- The matter of expulsion will be placed on the agenda for the next regularly or specially scheduled meeting of the board of directors;
- If the board votes to expel the member:
- The credit union will apply any member shares available to cover the loss;
- The member who has caused such loss will be sent a letter, notifying the member of his or her expulsion
Any shares remaining, after the credit union exercises its right to apply shares to amounts due, will be forwarded to the member with the expulsion letter.